‘Budget 2000 should simplify tax law before its growing complexity and expense leads to a rising spiral of tax avoidance,’ according to the institute’s tax faculty.
The faculty’s tax spokesman Francesca Lagerberg tells MPs: ‘Despite endless talk about simplifying the system, the huge number of alterations to the tax regime in recent years have made life increasingly difficult for taxpayers.
‘Many of them can no longer find their way around the system without paying for professional help. There’s real stress out there, particularly on small firms.
‘Businesses are finding it hard to administer payrolls correctly because of new impositions by Whitehall. The average person finds it increasingly difficult to see the connection between their activities and the tax that they have to pay.
‘Yet the Government and the Inland Revenue persist in bringing forward major new proposals which add to the complexity of the system such as the IR35 proposals which hit all those consultants offering services through their own companies.’
The institute goes on to issue a stark warning to MPs. ‘When it’s no longer possible for reasonably intelligent people to understand the basis of their tax liabilities, it’s only a short step to their questioning their moral responsibility to comply. The nation cannot afford a rising spiral of tax avoidance but we fear it’s on the way unless urgent action is taken to prevent it.’
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