Tories must simply get real

Alex Hawkes

Tax complexity is one of those tricky topics that I think nobody really knows
how to solve, and I suspect there are good reasons for cynicism about the whole

The plans are two-fold ­ an Office of Tax Simplification to monitor tax
policies and a joint parliamentary committee on tax matters.

Of the two, I like the second far more. MPs are, to put it mildly, very
ill-briefed on tax frequently. To ask them to scrutinise the finance bill is
hopeless, and a joint committee, comprising the much more experienced members of
the House of Lords as well as those from the commons, would add to the
intelligence of the debate.

An Office of Tax Simplification is less attractive. More bureaucrats do not
create less bureaucracy, surely a principle the Tories exists to promote.

Like a corporate social responsibility department within a multi-national, it
will only exist to be paid lip-service to. Real simplicity, like real CSR, comes
from the top; in the case of tax, from clear thinking and a desire and political
will to embrace radical solutions.

Take the example of the debate over multi-nationals leaving the UK. It has
been hampered by complex arguments over whether we should lower the corporate
tax rate, or just hammer the big companies with fiercely complicated rules about
overseas subsidiaries. I doubt either would work.

In fact, the most elegant solution, rarely discussed, came from Deloitte. It
suggested a low tax rate for mobile income, recognising that some things can be
taxed and some can’t.

The Tories should aim for similar realism on all aspects of tax. By doing so,
they may get somewhere towards a simpler and better tax system.

Alex Hawkes is news editor of Accountancy Age

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