Tax complexity under the spotlight
A Labour peer this week blamed the complexity of the UK tax system on the 'huge' tax avoidance industry.
Lord Haskel claimed that many members of the tax avoidance industry were the very same people who continuously called for tax simplification.
The debate was sparked by former English ICA president Baroness Noakes who enquired how the government would respond to ICAEW’s Tax Manifesto and then questioned whether it was committed, in any sense, to tax simplification.
In response, Lord McIntosh of Haringey said he agreed with several of the 10 tax tenants contained in the ICAEW’s report, and called the report ‘interesting’ and ‘worthwhile’. However he disagreed with Baroness Noakes’ accusation that the 600-page Finance Bill was too complex, saying the length of the Bill was no indication of its value.
Lord Haskel said it was in ‘taxpayers interests’ that tax law remained complex, as it countered the attempts of highly paid tax experts (compared to the lower wages of Inland Revenue tax officials) to minimise the burden.
Responding to comments made by Lord Goodhart that sections of the Bill were ‘largely useless’, Lord McIntosh said that if his committee tried to deal with each individual complaint about defects in the tax system, it would add to the present tax structure, without reforming it. He concluded by saying there was no ideal solution to the problem.
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ICAEW attacks ‘unclear’ tax system