IR35 and income tax/NI top advisers’ bugbears

DIFFERENT RULES for income tax and national insurance, plus problematic freelance tax rules, were among the main bugbears for the tax adviser community flagged up during a major roadshow event.

The Office of Tax Simplification has held 40 events in the past three months with tax advisers and small businesses. The impracticability of IR35 freelance tax rules, the differences between income tax and NI, plus the frequency of changes to tax rules were the most common issues highlighted by attendees.

“Some points we had already identified, but others provided real food for thought – it’s important we consider all ways to making taxation for small businesses in particular a little easier,” said OTS tax director and CIoT tax policy chief, John Whiting (pictured).

“I’m delighted that these events were so well received and stimulated such valuable debate among those attending. That is exactly what we hoped for as we seek input to help us simplify Britain’s tax code as openly as possible.”

The office was created by chancellor George Osborne to provide advice on improving and simplifying the UK’s tax system. Whiting recently topped Accountancy Age’s 2011 Financial Power List for his influential role at the OTS.

david gaukeSpeaking to the Financial Executive Network group in London this morning, exchequer secretary to the Treasury David Gauke (left) said the government wants “stability and certainty” at the heart of the tax system, but was “mindful” of fiscal pressures, taking time to make the right changes; and that making changes could in itself increase uncertainty.

“We believe firmy in the benefits of consultation, especially in tax. There are well-established norms about the length of time we should consult for, and it seems only polite to adhere to them,” said Gauke.

“So we will be a government of fewer, better thought-out reforms; one that engages business throughout policy development; and one that places a greater emphasis on simplification.”


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