Accountant gives new tax Bill thumbs up
A leading tax accountant has given his seal of approval to the first tax Bill, covering capital allowances, to have emerged from the tax rewrite process.
Adam Broke, chairman of the Consultative Committee of Tax Law Bodies, told the Joint Tax Simplification Committee: ‘It is better by a distance than anything I have seen before.’
He tempered this by adding: ‘It is not, I would say, readable, but it is understandable.’
Broke hoped the Bill would be an example for future rewrites which will cover income tax, corporation tax, capital gains, stamp duties, inheritance and management.
In his opinion, the Bill contained changes in the law but not in the practice of it.
A major concern of the consultative body was to ensure alterations made to the Bill balanced each other out. Broke claimed the changes did not benefit the Revenue in any meaningful way, but said alterations were mostly neutral in their effect on revenue raising.
Broke admitted that the law remained very complicated and estimated there would ‘not be any great savings’ in compliance costs.
Joint Committee chairman Kenneth Clarke will now report whether the committee is satisfied that the drafting of the Bill is an improvement and whether the rewrite has achieved its purpose and will be of practical benefit to users of the legislation.
Clarke said: ‘We have a particular duty to ensure that the changes made are minor and necessary for the purposes of re-writing the Bill in plain language and that they do not involve a policy shift in the burden of taxation which ought only to be made in a Finance Bill.’
Dr Helen Caldwell, of the Inland Revenue Tax Law Rewrite Project, said the techniques used included attempting ‘to deliver information in the right-sized pieces’, which involved splitting clauses in two in some cases and using shorter sub-sections.
She said the Revenue team tried to replace cumbersome phraseology. As an example, a phrase like ‘return required by the Taxes Management Act’ was replaced with the simpler ‘tax return’.
Neil Munro, a member of the Revenue team, said the next simplification Bill would deal with employment income.
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