The Chancellor, George Osborne, has announced the launch of an Office of Tax Simplification ('OTS'), which will have as its 'principal focus' the simplification of the tax system. The Chancellor said the OTS would provide 'independent, expert advice' to help resolve the 'mess' of the current tax system.
The OTS will work on two reviews; one which will focus on tax reliefs and another which will focus on the taxation of small businesses.
It is the review of tax reliefs which will be of most interest to charities, with the potential scrutiny of Gift Aid and the substantial donors' rules and other reliefs which affect charities either directly or indirectly.
The Government has asked the OTS to identify in particular those reliefs which:
- are largely historic or have a policy rationale that has weakened over time;
- are not frequently used;
- benefit a small number of taxpayers but may create distortions in the tax system; or
- are used by larger number of taxpayers but that are complex for business and/or HMRC to administer.
John Whiting, President of the Chartered Institute of Taxation and former partner at PricewaterhouseCoopers, has been appointed director of the OTS. He will lead a small secretariat of approximately six staff.
They are due to publish an interim report on the review of tax reliefs in late autumn 2010. A final report with recommendations is due to be delivered to the Chancellor ahead of next year's Budget.
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