The Bill is a magnificent achievement. It will sweep away not just the Capital Allowances Act 1990, but many other bits of legislation scattered through Finance Acts. The table of repeals is four pages long.
Moreover, the Act is not too long. One big fear of the Project was that using plain English would mean using far more words than old-style tangled and condensed drafting. It has not happened. If we leave out consequential amendments and transitional provisions, we have a Bill of only 254 pages, well-spaced and in decent sized print.
So why has it taken years to get to this point? An accountancy student can learn how to do capital allowances in a few days, and an experienced practitioner could write a decent textbook on the subject in a few weeks.
The comparison is unfair. The accountancy student will not learn every obscure aspect of the law, and the text book will leave some things unsaid as it can rely on the common-sense of readers to fill in the gaps. For example, if we are told that allowances replace depreciation, we do not need to have their treatment as deductible expenses spelt out. The legislation cannot cut corners like that.
The Project Team also had to find all of the interactions between rules, and make sure that they were all dealt with correctly. Look, for example, at section 3.11.3. This tells you how to give allowances if a lease ceases while an industrial building is temporarily out of use. The Bill would have been incomplete if it had dealt with lease cessations and with temporary non-use, but had not dealt with the two together.
Picking up all the interactions must have been a long, painful task.
I am glad the Project Team did it thoroughly, but sorry that we have law which makes it so difficult. However, it is not entirely the fault of tax law. The above example had to be tackled because we have land law which allows for leases, and because trades would start and end even if there were no law at all.
Given that this is so, the simplification of tax law which many of us call for would not in itself remove all of the Project’s headaches. But it would remove many of them. For example, the definitions of plant and of industrial buildings take up far more paper than they are worth. They were intricate to write, and even now they are not easy to read.
If nothing can be done about non-tax complexity, something should certainly be done about tax complexity. The Project Team know full well which have been the most painful parts of the law to re-write. They have also researched the background of the existing law, to find out why it is there. There must be plenty of provisions which were introduced for reasons which no longer hold good, or which were introduced for no apparent reason.
I call on the government to publish a catalogue of these painful and redundant provisions. It would give us a good indication of just how much our tax system could be cleaned up, without making too much difference to who pays what tax. No doubt other legislation, outside the tax field, could benefit from the same clean-up. But a lot of legislation could also benefit from two valuable techniques which have been developed in the Re-Write.
One is the use of the imperative. We see this in section 2.4.9 of the Bill. It is perfectly clear. It says ‘Use this section to decide whether expenditure is incurred by a small enterprise’. It does not say ‘This section has effect to determine whether …’, or some such old confusing phrase. Likewise, if road traffic law got straight to the point by saying ‘Do not drive when you are drunk’, we could all read the law itself.
The other technique is the use of a clear structure. Parts and chapters deal with logical topics in a sensible order. This is emphasised by the three-part numbering system: section 2.4.9 is in Part 2, Chapter 4, which is where it belongs. Books on how to write clear manuals and reports have been telling us to use a clear structure, reflected in the numbering of headings, for years.
The law is finally catching up – and a good thing too!
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