Taxation - Tories identify 23 tax rates
Chancellor Gordon Brown has been accused of complicating the tax regime to the extent that ‘only accountants stand to benefit’.
Tory MP Tim Loughton, who is a director of an asset management company, said accountants would have ‘a field day’ because of complications in income and capital gains taxes resulting from Budget changes.
Loughton, MP for East Worthing and Shoreham, said proposed changes to CGT ‘represent a minefield of confusion and complication which can be welcomed only by the accountancy profession.
He added: ‘By my calculations, before the Budget we already faced the prospect of five different income tax rates: 20%, 23% and 40% for most incomes, and 10% and 32.5% for dividends.
‘If that were not complex enough, under the new proposals for CGT tapering there will be fewer than 18 new different rates for CGT for private individuals on non-business assets alone. That makes 23 different rates of tax for dividends and CGT alone – that’s hardly “keeping it simple”!’
Nigel Lawson started the ‘simplification’ of the tax regime when he was chancellor, although Kenneth Clarke split CGT relief into two separate rates, which was seen by some to make the system more complicated. But Loughton said Brown’s changes were inexcusably complicated.
Loughton said: ‘I know of no other country with such a complicated system. I cannot believe it will survive the full rigours of the Finance Bill Standing Committee.’