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Experts find 1,042 tax reliefs

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The challenge facing the Office of Tax Simplification became clearer today when it emerged that the UK’s tax system has more than 1,000 reliefs.

The OTS published the first ever comprehensive list of the UK’s tax reliefs and allowances and is inviting comments from those who use them. It also announced the appointment of 32 tax experts to two new consultative committees.

The Chancellor asked the OTS to identify reliefs that should be simplified or repealed.

John Whiting, its Tax Director, said: ‘I am sure some people will be surprised by the sheer number of reliefs in today’s tax system. Many have a clear and highly valued benefit so clearly we would not seek to change those.  Others, however, may simply no longer be used, or are too complex and burdensome to be properly effective, so it is these that I want my team to focus on.’

A 64-page spreadsheet listing 1,042 reliefs is available on the Treasury website. The reliefs range from income tax personal allowances and reliefs for trading losses to ‘black beer relief’, which is described as an ‘historic exemption from excise duty for a fermented beverage made from malt and molasses, often without hops’.

David Gauke, the Exchequer Secretary to the Treasury, said: ‘I think the sheer number of reliefs in the tax system will surprise many people and highlights just how complex the UK’s tax system became over the past decade. This is exactly why we established the Office of Tax Simplification earlier this year to look at ways in which we can simplify the tax system for all taxpayers.’

An interim report will be published by late autumn 2010 followed by the final report with recommendations to the Chancellor by Budget 2011, the OTS said.

Consultative committees
The OTS has also appointed 32 experts to two consultative committees.

The Tax Reliefs Review Committee comprises:

Bill Dodwell, Carol Boneham, Cerys Morgan, Chas Roy-Chowdhury, David McDowell, Derek Allen, Erin Robinson, Francesca Lagerberg, Jane Seabrooke, Jeegar Kakkad, Keith Gordon, Paul Aplin, Richard Baron, Richard Thomas, and Dr Brian Sloan.

The members of the Small Business Review committee are:

Andrew Hubbard, Andy Richens, Angela Williams, Anita Monteith, Anne Redston, Chris Bryce, Chris Try, Crawford Temple, Guy Bridger, Judith Freedman, Lionel Griffiths, Peter Gravestock, Phil Needham, Robin Wythes, Simon Hacker, Simon Pemble and Simon Sweetman.

The OTS, led by Whiting and former Treasury minister Michael Jack, has a staff of seven experts drawn from the Treasury, HMRC and private firms.

The private sector secondees are Thomas Byng, Senior Manager at Deloitte; Kate Cottrell, Director of Bauer & Cottrell, a provider of IR35 contract review services; Partha Ray, Senior Tax Manager at BDO; and Caroline Turnbull-Hall, Senior Manager at PwC.