TaxPersonal TaxPush on tax revamp.

Push on tax revamp.

Rewrite project expected to introduce simpler income tax legislation

Easier-to-read income tax legislation should be ready for introduction to parliament within the next three years, according to the Tax Law Rewrite Project. The Inland Revenue said last week that the first Bill, relating to employment income, should be in parliament by November 2002, while a second, probably covering trading, property, savings and investment income, should be ready 12 months later. The news follows comments from Steve Matheson, deputy chairman of the Revenue, that the accountancy profession is to blame for the complexity of tax through the creation of a tax avoidance ‘industry’. And this week Richard Mannion, the recently-appointed president at the Chartered Institute of Taxation, asserted that the tax system was ‘creaking at the seams’ and was in need of reform. As part of its work on the first Income Tax Bill, the Rewrite team will reconstruct the Pay as You Earn regulations – a move which the Revenue hopes will earn the approval of employers and comes despite intentions that the project would not involve itself with secondary legislation. Dawn Primarolo, paymaster general, said in a parliamentary answer: ‘I am pleased to say the Tax Law Rewrite project is making good progress and continues to enjoy wide support.’ She said a draft Capital Allowances Bill would be published at the end of July for final consultation. There is general concern about the tax system and its complexity as a result of efforts to draft legislation that blocks tax avoidance. Movements in areas such as Dutch mixers has prompted many to believe the government is overly concerned with what it calls ‘unfair avoidance’ on issues which have been commonly accepted as legitimate in the past. The chairman of the project steering committee is former chancellor Lord Howe. It is intended that over 6000 pages of tax legislation will be rewritten over the life of the project, established in 1996. www.inlandrevenue.gov.uk/ rewrite/index.htm.

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