TaxPersonal TaxRewrite first, simplify later, says Howe

Rewrite first, simplify later, says Howe

The government is being urged to scrap part of the Provisional Collection of Taxes Act to allow parliament more time to review proposed tax law changes.

The plans were put forward by Lord Geoffrey Howe of Aberavon – acknowledged as a great proponent of tax law reform – during House of Lords’ debates on the re-written Capital Allowances Bill.

He said the automatic guillotine that applies to changes in the rate structure and the core elements of Finance Bills should be removed from other elements of annual legislation.

This would allow for more consideration of tax policy simplification.

Lord Howe said many people were ‘understandably dismayed’ with the Capital Allowances Bill because, while it involved re-writing the legislation, it did not simplify the operation of the tax.

But he warned attempting both re-writing and simplification simultaneously ‘would be impossible’.

‘If we were to try to postpone the rewrite until we had simplified the policy, we should be throwing out the horse before we even found the cart, which would be a pretty perverse way of setting about it,’ he said.

Lord Howe traced current reform efforts back to a speech he delivered to the Aldington Society a quarter of a century ago. Progress has so far amounted to a mere 5% of the pages devoted to tax legislation. A first Income Tax Bill dealing with employment income, social security and pensions is forecast for November next year 2002. A second on trading income, property income, savings and investment income is expected by November 2003, but Lord Howe warned more staff will be needed if progress is to be maintained.

Link

Commons body to monitor tax rewrite

Simplicity and stability: The politics of tax policy

ICAEW attacks ‘unclear’ tax system

Capital Allowances Bill is magnificent

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