ADVISERS HAVE CALLED on the Office of Tax Simplification to overhaul the tax system rather than “tinker round the edges”, in its report on reliefs to be released on Thursday.
The report, which has been overseen by the Chartered Institute of Taxation policy director John Whiting (above), is the first of two, with a report on small and medium businesses due next week. In its interim report last November, the OTS identified a total of 1042 tax reliefs, some of which it would review.
However, Neal Todd, corporate tax partner at law firm Berwin Leighton Paisner, said he was concerned that the report would “tinker around the edges” of the tax system.
“We hope the OTS grab this once in a lifetime opportunity to introduce radical changes that matter to business and other taxpayers,” he said.
However, he added: “I’m not terribly optimistic… I am concerned the OTS has laboured to bring about a mouse.” He said it would be “fine if the UK tax system was functioning well but needed tidying up at the edges”, but he did not believe this to be the case.
Richard Mannion, national head of tax at Smith & Williamson, said areas to look out for in the report included changes to: principal private residence relief, which was used by some MPs to “flip” their principal homes; entrepreneurs relief, which was “written in a weekend, and it shows”; and potentially exempt transfers for inheritance tax (IHT), perhaps lengthening the seven years before death exemption.
He said long shots would include a merging of IHT and corporate gains tax, with the introduction of a single “wealth tax” that would apply to non-residents too and the possible merger of income tax and national insurance.
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