Tax system “not yet moving towards simplification”

MUCH MORE WORK is needed before the tax system is said to be moving towards simplification, MPs have said.

The Treasury select committee’s report on the Budget said that measures taken by chancellor George Osborne had slowed “the rate of increase of complexity”.

The MPs said they “recognise that it is very difficult to simplify an already complex system” and welcomed the establishment of the Office of Tax Simplification. “However, the primary duty for securing simplification should lie with the Government in its design and administration of the tax system,” the report added.

The committee also said that the proposal to merge National Insurance and income tax is likely to generate some benefits for the operational aspects of the revenue streams. However, “it falls well short of the more fundamental merger that had been anticipated in the press in advance of the Budget speech”, they added.

“This is a complex issue and we understand the chancellor’s desire to move cautiously. The change appears to have been anticipated as a radical measure but turned out, at second glance, to be a modest one,” the report said.

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