Monthly Archives: September 2015

Michael Jack steps down – so we are looking for a new chair for the OTS

The OTS has been fortunate to have had the same chair for the first five years of its existence – the Rt Hon Michael Jack CBE. Michael has made a great contribution to getting the OTS up and running and developing our role and reputation but he has decided that at the end of his five-year term he is stepping down and not seeking reappointment. We owe him a good deal and wish him well in his future endeavours – which includes establishing his new base of operations in the West Country.

Teresa Graham, chair of the Administrative Burdens Advisory Board and one of our Board members, will be acting as interim chair of the OTS. The Treasury has now opened the recruitment process for a new OTS Chair.

The OTS appointment will be made by the Chancellor and the job description (see http://publicappointments.cabinetoffice.gov.uk/appointment/chair-office-tax-simplification/ ) says that the Chancellor ‘…would like to appoint an energetic and committed individual to chair the Office of Tax Simplification (OTS) board…’. He is clearly looking for someone in Michael’s mould with that requirement!

As the role description goes on to say, this is a real opportunity to participate in tax policy-making at the heart of government. We are now a permanent office of the Treasury and will be put on a statutory basis in Finance Bill 2016. We can’t of course change the tax system ourselves but we have a good success rate with our recommendations which always aim to reduce compliance burdens on both businesses and individual taxpayers (and indeed HMRC). It’s all about providing independent advice to the Chancellor and Treasury Ministers on simplifying the UK tax system: we have shown our value to them and we are listened to.

No doubt those reading this blog will think ‘OK, sounds interesting…but what does the Chair actually do?’ The formal job description spells it out, but it can be summarised as setting strategic direction for the office, working with the Tax Director on the direction of the projects and reports (rather than doing the detail work on our reports) and as necessary leading the OTS’s engagement with Ministers and Parliament.

The deadline for applications is Friday 30th Oct 2015, with interviews in November, and I very much look forward to working with the successful applicant.

John Whiting, OTS Tax Director

HMRC launch revised Statement of Practice D12 on capital gains for partnerships, following recommendations of the Office of Tax Simplification (OTS)

Capital gains for partnerships has a very limited amount of legislation. The area has been covered by a Statement of Practice (SP D12), issued by the then Commissioners of Inland Revenue following discussions with the Law Society and the Allied Accountancy Bodies in January 1975. In discussions with businesses and their advisers, the OTS found the statement was understood by large firms and most advisers, although smaller unrepresented firms and even some practitioners were not aware of the statement or its implications. Almost inevitably, the statement included references which had become out of date, and the writing style needed to benefit from more modern practices.

In our Review of Partnerships Interim and Final Reports, published January 2014 and January 2015 respectively, the OTS recommended keeping SP D12 largely intact rather than introducing a legislative version. However, the OTS was clear that the statement needed refining in some areas and updating into a more modern style with links to examples and further information within the HMRC guidance.

A sub-group of OTS stakeholders have continued to advise HMRC on the areas that needed updating, and the revised statement has now been published by HMRC. A number of stakeholders involved in the review of SP D12 commented they found the revised statement to be a considerable improvement over the original version.

The OTS is publicising this relaunch of SP D12 in order to raise awareness of the statement and the fact that it has been updated. As noted, smaller partnerships and some advisers need to be aware that this is the place to determine, for example, how partnership goodwill is subject to tax, together with the capital gains reliefs that may be claimable. HMRC endorse the need for reminding people on this and other partnership capital gains matters.