TaxCorporate TaxTreasury’s new recruit admits system is too taxing

Treasury's new recruit admits system is too taxing

New MP in charge of HMRC admits corporate tax system needs simplifying

Stephen Timms

Stephen Timms

The new minister in charge of
HM Revenue &
Customs
has admitted the corporate tax system needs simplifying.

Stephen Timms MP told an audience of tax experts at a CBI tax conference
earlier this week that the challenge was how to implement simplification.

‘I accept we do need to simplify the tax system. The challenge is developing
reform, delivering simplification and avoiding uncertainty,’ the recently
appointed financial secretary to the treasury said.

The conference included a panel discussion between political party
representatives where the only uniform agreement between the panellists was on
the objectives of reforming the corporate tax system, namely in areas of clarity
and transparency.

Timms conceded the government faces significant challenges in developing a
more efficient system.

Philip Hammond MP, shadow chief secretary to the Treasury, said the problems
were becoming worse.

‘We don’t know what we’re going to inherit… a big chunk of each finance bill
seems to be correcting the mistakes of the previous two bills,’ he said.

In the ongoing fight against tax avoidance, Hammond said the government has
introduced ‘complexity after complexity’.

The need for transparency and greater consultation between policymakers and
business was a theme echoed throughout the conference.

The level of complexity and uncertainty are costs to business that have no
corresponding benefit to the exchequer, Hammond said.

‘[Complexity] is simply a dead weight compliance cost to business only,’ he
said.

Hammond added there needs to be ‘clear principles and philosophy behind the
system and a clear sense of where administration is going’.

The need for consistency and clarity in the administration of the tax policy
was backed by Richard Lambert, CBI director-general, who said imminent fiscal
strains would further highlight questions already posed by business.

He said the government needs to set a clear strategy for the next ten years,
including legislation, interaction between tax authorities and business, and a
reduction in the headline rate over the revised period.

Related Articles

Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

2m Alia Shoaib, Reporter
‘Improve rather than lose’ disincorporation relief, tax body urges

Administration ‘Improve rather than lose’ disincorporation relief, tax body urges

3m Austin Clark, Reporter
How to educate your clients about tax avoidance

Corporate Tax How to educate your clients about tax avoidance

3m Clear Books | Sponsored
CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

Corporate Tax CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

3m Austin Clark, Reporter
‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

3m Emma Smith, Managing Editor
Should I incorporate my buy-to-let business?

Corporate Tax Should I incorporate my buy-to-let business?

4m Emma Rawson