We published in January significant reports on Partnerships and Employee Benefits & Expenses and the Budget contained the Chancellor’s formal response to our various recommendations. It is pleasing that most of these are going to be taken forward and we had a fuller response from David Gauke, Exchequer Secretary to the Treasury (see https://www.gov.uk/government/publications/letter-from-exchequer-secretary-to-ots-response-to-partnerships-and-employee-benefits-reviews).
It’s not just these recent reports that are being taken forward. In last year’s Pensioners’ report, we recommended abolishing the 10% savings rate of income tax with a pragmatic increase in ISA amounts to compensate. The Chancellor’s announcement achieves most of the practical simplification we were after and there’s an ISA increase as well!
Our favourite topic of reforming NICs bore some fruit with the taking forward of collecting Class 2 NICs via self assessment. The OTS report on ‘unapproved’ share schemes has led to a number of measures in FB 2014. Two of our more radical proposals – on the timing of the tax charge and on an ‘employee shareholding vehicle’ – are to be taken forward by way of a discussion document.
As always, we need to do more and one of the documents published with the Budget is our paper on the Competitiveness project. Do have a look at our paper (see https://www.gov.uk/government/publications/competitiveness-of-uk-tax-administration-review). The Chancellor wants our ideas on improving the competitiveness of the UK’s tax administration and we welcome all input. What would make business taxes – corporation tax, PAYE/NIC, VAT and the rest – more efficient? If you could suggest one change to improve the competitiveness of the UK tax administration, what would it be? Let us know at email@example.com.
John Whiting, OTS Tax Director