The Office of Tax Simplification has responded to the joint Institute of Government, IFS and CIOT discussion paper, Improving tax policy making, published earlier this year (see www.bit.ly/2c767Nv). The OTS’s main points cover:
· Strategy: the development of further roadmaps would be beneficial in giving the taxpayer greater certainty and confidence in the tax system with fewer surprises;
· External engagement: it is vital to actively seek comments in response to consultations rather than to allow more time for comment;
· Internal Budget process: simplification should be embedded into the policy making process;
· Legislative scrutiny: to ensure finance bills are adequately reviewed by MPs there needs to be sufficient support given to non-tax specialists, which could include expert evidence to be called by finance bill committees;
· Post-legislative review: developing the OTS’s complexity index, which could ‘score’ draft or new legislation to ensure measures are up to date, achieve their intended goal and are value for money;
· Capability of HMRC and HMT officials: there is a high level of staff turnover in government officials and there is a risk that expertise and experience is not always replaced; and
· Public debate: there is a significant need to increase public interest and understanding of the tax system which could begin with teaching tax in schools.
Separately, the OTS has responded to HMRC’s consultation on changes to the intermediaries legislation for off-payroll work in the public sector, which proposed shifting the responsibility for determining whether the intermediaries rules apply from the personal service company to the public sector body. The OTS is concerned that the proposals will not, overall, deliver simplification. Some suggestions by the OTS include:
· considering a review focusing specifically on the taxation of the flexible workforce;
· a project to try to develop a simpler test that can provide binding certainty taking into account both tax and employment status; and
· the cross-government working group on employment status should develop a definition of the term ‘personal service company’.
The Office of Tax Simplification has responded to the joint Institute of Government, IFS and CIOT discussion paper, Improving tax policy making, published earlier this year (see www.bit.ly/2c767Nv). The OTS’s main points cover:
· Strategy: the development of further roadmaps would be beneficial in giving the taxpayer greater certainty and confidence in the tax system with fewer surprises;
· External engagement: it is vital to actively seek comments in response to consultations rather than to allow more time for comment;
· Internal Budget process: simplification should be embedded into the policy making process;
· Legislative scrutiny: to ensure finance bills are adequately reviewed by MPs there needs to be sufficient support given to non-tax specialists, which could include expert evidence to be called by finance bill committees;
· Post-legislative review: developing the OTS’s complexity index, which could ‘score’ draft or new legislation to ensure measures are up to date, achieve their intended goal and are value for money;
· Capability of HMRC and HMT officials: there is a high level of staff turnover in government officials and there is a risk that expertise and experience is not always replaced; and
· Public debate: there is a significant need to increase public interest and understanding of the tax system which could begin with teaching tax in schools.
Separately, the OTS has responded to HMRC’s consultation on changes to the intermediaries legislation for off-payroll work in the public sector, which proposed shifting the responsibility for determining whether the intermediaries rules apply from the personal service company to the public sector body. The OTS is concerned that the proposals will not, overall, deliver simplification. Some suggestions by the OTS include:
· considering a review focusing specifically on the taxation of the flexible workforce;
· a project to try to develop a simpler test that can provide binding certainty taking into account both tax and employment status; and
· the cross-government working group on employment status should develop a definition of the term ‘personal service company’.
