By the time this appears in print, the Finance Bill 2001 will have been published.
There are two possibilities: if the election is called, we will get a very short Bill, perhaps as little as three lines.
On the other hand, we may get the full Bill setting out the measures announced in the Budget – and if, as expected, the present government is re-elected, these measures will certainly be included in a second Finance Bill later in the summer.
I think this is the more likely outcome: indeed, one conspiracy theory ran that Tony Blair would have to call the election on 3 May since otherwise Gordon Brown will be caught out without having drafted the full version of the Finance Bill!
Whenever it finally appears, this year’s Bill will do little or nothing to reduce the complexity of the tax system. Instead, we shall get another two or three hundred pages of detailed legislation.
Even proposals which are clearly aimed at simplification, such as the idea of basing small companies’ tax computations on the accounts, are likely to be hedged around by anti-avoidance rules and complex provisions for companies which move from one band of profits to another.
The aphorism which I would really like to see politicians (and the Treasury, and the Inland Revenue, and Customs & Excise) grasp is that perfect fairness leads to infinite complexity – which is itself unfair.
Surely it should be possible to improve the system so that the vast majority of taxpayers understand how much they are being asked to pay – who knows, they might then even be more willing to pay it.
I do believe that there are some grounds for optimism.
The groundswell of opinion, from businesses, tax advisers and the public, is that the system is creaking at the seams and we cannot go on like this.
A few days ago, the CIoT president Richard Mannion issued a challenge to the Inland Revenue to put tax simplification high on their agenda: I am delighted to report that Ann Chant, deputy chairman of the board, accepted the challenge.
I believe the time is right for change: now let’s work together to make it happen.
– Heather Self is a tax partner with Ernst & Young and vice-president of the Chartered Institute of Taxation.