If you could make one change to tax...

Here are 25 answers to that question from individuals who took part in Tax Journal's 'One minute with' feature during 2018. (All answers are personal opinions.)

1. A reader’s panel: ‘We should have a readers’ panel to look at the wording of all new legislation to ensure it makes sense to practitioners.’ Iain Campbell, HMRC (Tax Journal, 7 December)
    
2. Less mistrust: ‘A better working relationship between tax authorities and large businesses. In my experience, the vast majority of entrepreneurs and businesses are looking to get tax right, whilst grappling with an increasingly complex and global tax system. However, there are still some tax authorities in the world, and some individual tax officers, who default to the position that taxpayers should be treated with suspicion.’ Jo Crookshank, partner at Simmons & Simmons (30 November)
    
3. A reverse Ramsay: ‘A change I would still like to see is for the courts to do more to develop a ‘reverse Ramsay’ principle, in favour of taxpayers. Tax should not be levied on the basis of a highly literalistic interpretation of the law where a transaction, viewed realistically, is consistent with the purpose of the legislation.’ David Wilson, partner at Cooley (23 November)
    
4. Scrap withholding tax: ‘I would abolish UK withholding tax on interest. The tax take must be tiny compared to the costs incurred in managing it. If that were to be considered a step too far I would introduce a corresponding adjustment provision for interest which is non-deductible under the corporate interest restriction rules.’ Andrew Howard, partner at Ropes & Gray (16 November)
    
5. Reform stamp duty: ‘I’d make some changes to UK stamp duty, or preferably do away with it altogether (and just leave SDRT to do the work). For instance, it is a bit nuts that the territorial scope is based on a pretty vague and broad provision from 1891. It’s never fun to have to explain to our corporate colleagues that they may want to arrange offshore signing ceremonies on large multinational restructurings for the transfer of non-UK issued securities between non-UK parties, especially in the context of a ‘voluntary’ duty.’ Sophie Donnithorne-Tait, partner at Akin Gump (16 November)
    
6. Overhaul MTD for self-assessment: ‘I am concerned that quarterly returns are likely to create additional work for very little, if any, benefit to either the taxpayer or HMRC. The idea of increasing technology in tax compliance is a good one, but it seems to be being rushed. HMRC has issues with its current software, PAYE records take months to be made available to taxpayers and too many taxpayers lack either the facilities or the knowledge to deal with this. Given several recent cases where electronic penalties and notices have been declared invalid, I think it important to make sure that tax law is keeping up with technology and HMRC practice.’ Karen Clark, partner at RSM (19 October)
    
7. Rewrite ITEPA: ‘At present, the anti-avoidance legislation in relation to the taxation of employee benefits is over-complex and not fit for purpose. There needs to be a clear distinction between the rewards provided for employment, which should be taxed as income and the benefits of true equity ownership, which should be taxed as capital. The disguised remuneration rules, which were unnecessarily all-encompassing with unclear exemptions, should be simplified and amended in light of the Rangers decision.’ Karen Cooper, founding partner of Cooper Cavendish (12 October)
    
8. Match commercial reality: ‘Tax should be seen as a consequence of productive transactions and events, and not as a law in itself. If tax authorities want businesses to align their tax planning with commercial reality, they need to respect that tax assessments should also track commercial reality. A literal or inadvertent application of tax law should not give rise to tax being applied when commercially no productive transaction has been undertaken. Often tax applies in a vacuum, which cannot be justified by explaining that there is nothing logical about tax!’ Prabhu Narasimhan, partner at White & Case (28 September)
    
9. A lighter compliance burden for SMEs: ‘I would make tax compliance more straightforward for small and medium sized businesses when it comes to hosting short-term business visitors to the UK. Under the current regime, the UK duties of non-UK resident business visitors may be exempt from UK tax and PAYE. However, in order to be compliant, employers need to understand the appropriate parts of the relevant double tax treaty and concepts such as ‘incidental duties’ and ‘economic employer’. The employer also needs a short-term business visitors’ agreement from HMRC, and to commit to potentially onerous tracking and reporting of the relevant people and information. The current regime may be fit for purpose for larger employers or those with large short-term business visitor populations. However, it is impractical for those employers which may be setting up in the UK for the first time or only have limited HR and payroll resources.’ Lee Hamilton, partner at Blick Rothenberg (21 September)
    
10. Adopt a principles based approach when drafting tax legislation: ‘The legislation has become over-engineered, trying to cater for all eventualities but without articulating its underlying purpose. The result is a patchwork that is inaccessible and unduly complex, and which inevitably contains inconsistencies and gaps. It would be preferable for the principles upon which the legislation is based to be much more explicitly expressed, enabling the specific rules to be set out much more concisely. This would, however, require fundamental change in the style of drafting tax legislation.’ Jonathan Bremner QC, barrister at Pump Court Tax Chambers (7 September)
     
11. Reform SDLT on partnerships: ‘The complex SDLT regime is ripe for a thorough review, as the regime has evolved into a mish-mash of conflicting principles on a seemingly ad hoc basis. The SDLT partnership rules spring to mind: the draconian rules on corporate partnerships are in conflict with how many valid business ventures need to be structured for cogent business reasons. This is cropping up quite frequently with our work on public private joint ventures. Instead of a sledgehammer approach, I would prefer to see a purposive approach adopted in these rules.’ Robin Dabydeen, partner at Winckworth Sherwood (31 August)
     
12. Reverse the 2010/11 change to the self-assessment late filing penalty: ‘The old penalty was capped at the tax due. We now have a situation where someone who is owed a refund but who is late with their return is exposed to penalties of £1,600 after a year. That is unfair, disproportionate and often counterproductive. The problem will go when we have a points-based system, but why wait?’ Paul Aplin, ICAEW president (20 July)
     
13. Post-Brexit competitive reform: ‘I would like to see our tax laws become more competitive in certain areas after Brexit (whatever that may end up looking like). The investment funds space immediately comes to mind. It would not take much to catch up with the likes of Luxembourg without the UK ending up with a ‘tax haven’ tag.’ Arun Birla, partner at Paul Hastings (13 July)
     
14. Ban retrospective legislation: ‘Retrospective legislation has become notorious in Indian taxation following the famous Vodafone decision. We need an international standard banning it. I know that will never happen, not least because it will be hard to agree a definition of what counts as retrospective. But it’s a nice thought.’ Nikhil Mehta, barrister in Gray’s Inn Tax Chambers (6 July)
     
15. A sense of reality: ‘I would try to restore a sense of reality to the UK tax system. The decision in Wilkinson [2005] UKHL 30 caused a whole scale change in the attitude and approach of HMRC. The case involved a widow’s bereavement allowance and some of my then colleagues in the Revenue approached the decision with almost a complete lack of understanding of what eliminating discretion would mean in the ‘real world’. What was most alarming was the complete loss of context and the Revenue’s position that whatever discretion it had did not extend to giving a relief that Parliament had not provided. Extra statutory concessions were washed away, removing the ‘oil’ that sometimes allowed the wheels of the tax system to turn.’ Ray McCann, CIOT president (29 June)
     
16. One in, two out? ‘We’re all struggling under the burden of the UK’s complex and lengthy tax code. If the US, however imperfectly, can reform its tax code fundamentally in just 500 pages of double-spaced text, how do we in the UK manage to take 150 pages of legislation (and some 300 pages of guidance) just to implement new corporate interest restrictions? I’d like to see the UK take a less prescriptive and more purposive approach to tax legislation, rather than trying (and still failing) to legislate for every eventuality. And it feels like a gimmick, but perhaps we need to apply a ‘one in, two out’ approach to tax rules if we’re ever to get more focus on rationalising and simplifying the existing code.’ Dominic Mathon, head of group tax, RELX (22 June)
     
17. Make HMRC’s published practice binding: ‘I would make HMRC’s published practice binding (other than where, say, aggressive tax avoidance is involved). Given how frequently HMT/HMRC have said ‘we’ll make this clear in guidance’ in recent years, it seems only fair.’ Tom Jarvis, partner at Watson Farley & Williams (4 May)
     
18. Bang heads on transfer pricing: ‘For the OECD to bang heads together even more on TP to get countries to harmonise. A particular example is the ‘new’ TP documentation standards. For the most part, BEPS Action 13 has brought us a long way to harmonise the previously disparate documentation requirements of individual territories across the world. However, surprisingly few territories seem to be implementing the recommendations on master file, local file and country by country report in a straightforward manner ... And whether you have an (unnecessary, in my view) obligation to file a ‘local subset’ of your CBC report or leave the tax authorities to share the global report among themselves under a multilateral competent authority agreement is another step still. Taxpayers are still left with the burden of navigating multiple nuances. For all territories to play nicely may still be too much to hope for. Surely tax authorities have bigger TP fish to fry than tinkering with an already relatively comprehensive risk assessment tool?’ Chloë Fletcher, founder of Abaris Transfer Pricing (27 April)
     
19. Scrap the hybrids rules: ‘The hybrids rules are terrible – they just smack of something which seemed like a good idea conceptually, but in the real world they are almost unworkable. If you take ten entirely commercial cross-border financial transactions, two or three of them will be caught on a technicality. HMRC has to be applauded for the effort put into the guidance, but it is an impossible job to make the guidance even nearly comprehensive.’ Charles Yorke, partner at Allen & Overy (20 April)
     
20. More transparency about HMRC’s views: ‘It would be great if there was less ‘secret knowledge’ about HMRC’s views on some of the more complex areas of tax. At the present, there are a lot of HMRC interpretations which haven’t made it into the HMRC manuals, so only those who frequently practice in that particular area are aware of the accepted view. Greater transparency about HMRC’s views would be helpful and save time for all concerned.  The same applies to Revenue Scotland and the new Welsh Tax Authority, of course; perhaps there is an opportunity for both those organisations to make sure their guidance deals with all relevant points.’ Isobel d’Inverno, head of corporate tax at Brodies (15 March 2018)
     
21. Revise HMRC’s litigation and settlement strategy (LSS): ‘I wouldn’t rip it up completely as from the government’s perspective there needs to be a published strategy which does not reward tax avoidance. However, the policy and perhaps equally importantly the huge associated political pressure felt by HMRC not to be seen to be endorsing ‘sweetheart’ deals, sometimes prevents HMRC taking a sensible approach, for example on technical points or reaching a settlement. A more flexible approach in the LSS might be better for the long-term relationship between HMRC and taxpayers without encouraging avoidance.’ Ian Hyde, partner at Pinsent Masons (23 March)
     
22. Halt the common reporting standard (CRS): ‘I’m all for everyone paying the tax legally due but the erosion of privacy in the name of fairness has gone beyond the pale. And, of course, the ‘elephant in the room’ – that there is still corruption at governmental level in some jurisdictions receiving CRS information – is never discussed.’ Janet Pierce, founder of Charter Tax (2 March)
     
23. A better informed debate on tax: ‘I have been particularly impressed with the amendment Kirsty Blackman MP put forward to introduce oral evidence sessions during the Finance Bill process. Enabling MPs to have a rigorous examination of complex tax laws before they are passed is an obvious starting point, but it goes further than government. Later this year, the Women in Tax network (of which I am a member) is hosting a panel event on how education can help rebuild public trust in the tax system. I hope this will bring some renewed energy to this cause and encourage a better quality debate, based on facts not fiction.’ Rhiannon Kinghall Were, head of tax policy at Macfarlanes (22 February 2018)
     
24. Follow precedent, CJEU! ‘It would be nice if the CJEU were to follow precedent a bit more closely in some areas of tax law, so that there is more coherent development of EU tax law. Similarly, it would have been preferable if the European Commission addressed the criticism over the divergence of approach between established principles of the CJEU and some of the provisions of the Anti-Tax Avoidance Directive I.’ Christiana HJI Panayi, professor in tax law at Queen Mary University of London (12 January)
     
25. And finally… ‘I would vest the power to levy tax in respect of corporate profits in a sovereign global body.’ David Quentin, barrister (9 February)

Our thanks to all those who took part in Tax Journal's 'One minute with' feature.