1,042 tax reliefs: not so simple
TAX BOD JOHN WHITING has never been afraid of hard work, but he and his simplification team have got a big job on their hands after identifying 1,042 tax reliefs which may need an overhaul.
My sources tell me that it came as something of a shock to the Office of Tax Simplification (OTS) when the final tally was confirmed.
Not only has the team got to trawl through the huge number of tax breaks, it also has to give its recommendations to chancellor George Osborne in time for the budget next March.
Efforts will centre on whether anyone still uses a particular tax relief, whether it needs amending,or should be scrapped.
Sounds fairly straightforward, doesn’t it? Unfortunately, the OTS’ work will cover everything from:
– deductions allowed against taxable profits for people and businesses
– the personal allowances for income tax or the inheritance tax threshold.(Unlikely to change but the OTS will still have to tick the box which says the reliefs have been looked at.
– exemptions from tax – for example, cars are not subject to capital gains tax.
– tax reductions such as double taxation relief.
– tax credits.
– zero- rated items, for example talking books for the blin.
– reduced rates such as those levied on domestic fuel and power.
This covers a huge range of individuals and businesses of all sizes.
It’s a fair point to make that no matter how obscure a relief is, it may be a vital break used by a handful of companies in a niche industry, so what will the OTS do then?
There will also be reliefs which affect people and businesses on a wider scale. The OTS will have its work cut out whether to:
-“stick” ie leave it alone.
-“Twist ie restrict or widen the relief.
-” Fold” ie withdraw it completely.
Good luck, Whiting et al.