TaxPersonal TaxRevenue warning – UK tax system is in ‘worst state ever’.

Revenue warning - UK tax system is in 'worst state ever'.

Inland Revenue deputy chairman Steve Matheson has warned that the UK tax system is in the worst state he has ever seen and is 'creaking at the seams'.

Speaking at an English ICA tax faculty meeting last week, Matheson – who is due to retire within a few months – laid the blame for the complexity of the tax system on the accountancy profession. He added that the tax avoidance ‘industry’ was constantly looking for loopholes to exploit.

Responding to calls from the audience for wider self-assessment to reduce red tape on employers, Matheson ruled out a universal system of self assessment along American lines.

He did, however, hint that changes were in the pipeline for the accrued income scheme, a good example of an area of tax law that is out of date and requires simplification.

He added that the Tax Law Rewrite Committee was not allowed to make changes to the law. However, the committee had identified areas where the law could be simplified and these will be taken forward by the Revenue.

There was a trade-off between manageable yet simple legislation and the need for fairness and thus complexity in the way it is written, Matheson said. The Tax Faculty also used the event to launch its latest document which continues the argument for simplification.

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