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Tax code complexity could damage economy, warns think tank

TAX ADVISERS are charging up to £1,000 per hour for their services due to the ‘unsustainable’ growth in the UK tax code, a policy think tank has revealed.

The Centre for Policy Studies has found that the word count of Tolley’s Tax Handbooks has increased by roughly five million words since 2009, doubling its total word count to ten million, more than 12 times as many words as the King James Bible.

David Martin, a tax expert for the Margaret Thatcher-founded think tank, has said in his report that accountants have been charging up to £1,000 for their services, as the tax code is creating uncertainty for businesses of all sizes.

“The UK tax code for business is a complex and impenetrable assembly of piecemeal rules, accumulated over decades without having any overall review.

“Rather than correcting defective legislation with specific measures, the government has now decided that taxpayers should identify ‘the spirit of the law’ – so not only do we have an extraordinarily long tax code but taxpayers can no longer rely on what it actually says.

“Taxpayers can be intimidated by penalties from pursuing a tax appeal, and may be required to sign up to new codes of conduct, policed by HMRC,” said Martin, who has created his own Business Tax Act, which he claims is one eighth as long as the current tax law for business.

Last year, the ICAEW warned that unless the government tackles the complexity and length of the tax code, then its plans to reduce costs to businesses by £10bn will be unsuccessful.

John Whiting (pictured), tax director at the Office of Tax Simplification, has welcomed the think tanks’ report, telling Accountancy Age that he has viewed Martin’s Business Tax Act, and that issues like this these are “what we’re here for”.

Responding to Martin’s concerns over the length of the UK tax code, Whiting cited the OTS’ complexity index for the tax code, stating that the code’s length is “just one of ten factors that contribute to complexity.”

The OTS has today released its research into the closer alignment of income tax and national insurance contributions.


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