The Office of Tax Simplification (OTS) has just posted the following on its blog:
“Now that the 2014 Finance Act has received Royal Assent, we have updated our list of tax reliefs, which we last published in October 2010. The spreadsheet sets out all the reliefs, including those that have been abolished following our 2011 report and all the new ones introduced since then. In 2010 we counted 1,042 reliefs; there are now 1,140. Since 2010, the Government has abolished 57 reliefs, but added 151 new ones. The numbers don’t quite tally because 4 of the abolished reliefs were not in our original list.”
So the old maxim, more is less, is true after all… Readers with an interest in seeing the list of 1,140 reliefs can download an Excel file at https://www.gov.uk/government/publications/tax-reliefs-review
The report continues:
“Many of the new reliefs are purely structural, and are an integral element of blocks of new tax legislation – such as the Bank Levy, or the Disguised Remuneration rules, with their many exemptions. However, there are several completely new reliefs, such as reliefs for high end television drama, computer games and animation, and theatrical productions.
When we published our review of tax reliefs in 2011, we had only reviewed in depth 155 of the 1,042 reliefs we had then found. We always envisaged returning to the area in the future, not least because one of our key findings was that there was a need to have a system that reviewed existing reliefs to test their operation and continuing validity. We have kept up our list of reliefs to facilitate a further review but at present it is not a project we have the resources to undertake properly.”
It’s interesting that the government has a declared intention to simplify the tax system and yet the UK tax code is becoming ever more complex. Some of the ideas for simplification, advocated by the OTS, do seem to be filtering through. It’s unfortunate that anti-avoidance legislation is “bulking up” legislation, certainly at a faster rate than redundant code is being removed.
It’s a shame the government does not seem to be resourcing the OTS to do a proper job. Considering their present staffing levels the OTS is doing good work, but is it just “nibbling at the edges” of the problem? What about merging income tax and National Insurance?
We are unlikely to see real progress in this area until the OTS has more resources to resolve its current dilemma: that the identification of shortcomings in the tax code is one thing, taking action to simplify the code, quite another.