Profession gives Revenue the thumbs-up on simplification

Inland Revenue attempts to simplify the nation’s tax legislation won general approval from accountants last week.

But the profession’s tax experts also warned that much work is still required to ensure that the massive project to transform over 6,000 pages of archaic law into readable, digestible and comprehensible legislation is a success. Revenue experts working on the rewrite project tackled three initial areas: hold over relief – gifts of business assets; settling appeals by agreement; and sick pay.

The Revenue’s draft reforms are only intended as non-binding examples, but they provided tax experts with a clear indication of the end product the government department is aiming for.

The ‘before and after’ examples below reveal the dramatic effect of the work by Revenue draftsmen. The appeals rules, for example, have been significantly shortened, neatly split in two and clarified. The revamp even extends to a user-friendly typeface and easy-to-follow numbering.

KPMG tax partner Allan Taylor said: ‘We welcome the shorter sentences and clearer language, but our view is that something more radical must be done to successfully simplify the tax acts. ‘Greater simplification could be achieved by merging PAYE and national insurance legislation.’

Price Waterhouse tax partner John Whiting added: ‘The work on S.54 of the Taxes Management Act for settling an appeal by agreement is particularly pleasing.

‘It’s at a level that the man in the street can understand. But the problem remains that a lawyer might turn round and say it won’t stand up in court.’