Office of Tax Simplification Formed to Ease Tax Code Burden

Chancellor George Osborne launched an Office for Tax Simplification (OTS) on Tuesday.  It will not set tax policy but will seek to simplify tax code.

“The previous government took a complex tax system and made it even worse.  A decade of meddling and intervening has made the tax affairs of millions of families and businesses across the UK extremely complicated,” Osborne said at the launch of the new OTS.

“It is a spaghetti bowl of reliefs and allowances,” he said.  “I hold out for a dream, a distant dream, that people actually understand the laws they are being asked to comply with.”

The former Conservative Treasury minister, Michael Jack, will head up the OTS initially.  John Whiting, from the Chartered Institute of Taxation, will serve as director.  The two will lead the OTS in reviewing the tax system and seek to simplify it.  Rounding out the staff will be secretariat of civil servants and some private sector personnel.

Businesses, especially small businesses are welcoming the new establishment.

“This new Office of Tax Simplification is a brilliant idea and we congratulate the government for getting a move on and setting it up so soon after coming to office.  But we have to see results.  Good reports will not constitute results.  Legislation in finance bills will, ” said Richard Baron, head of the business lobby group, the Institute of Directors.

The initial review on tax reliefs is due in the Autumn and another on tax simplification for small business will be due before the 2011 Budget.

Treasury minister David Gauke stated: “The tax system created by the previous government was overly complex and has made the tax affairs of millions of families and businesses across the UK extremely complicated.

“The Office for Tax Simplification will provide important advice that will help inform us in making the right reforms to the tax system that will help to pave the way to bringing more international business to the UK, which will give our economy the boost it so urgently needs in the years ahead.”

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