Category Archives: Tax Simplification

John Whiting receives CIOT Council Award

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On Tuesday 14 January, John Whiting, Tax Director of the OTS received the Chartered Institute of Taxation (CIOT) coveted Council Award.

The award was given in recognition of John’s long service in the field of tax.  John was previously a tax partner at PriceWaterhouseCoopers for 25years, before becoming CIOT’s first Tax Policy Director in 2009.  As well as the enormous amount of work John currently does in running the OTS, in parallel he is also a non-executive director on the board of HM Revenue and Customs.

John was presented with the award at the CIOT’s annual presidential lunch at the Savoy Hotel in London.

The OTS team congratulates John on his award and is delighted to see his passion for improving the tax system being recognised by the CIOT.

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OTS visit to Preston

Preston1Last week John Whiting, Jeremy Sherwood and Jay Patel from the OTS visited the University of Central Lancashire (UCLAN).  There were two main reasons for our visit.  We wanted to talk to UCLAN’s accountancy students about the Employee Benefits and Expenses review, and look at some of the research they have done in this area.  Secondly, we conducted a workshop with local accountants, payroll professionals, and academics that work either at the university or in Preston.Preston2

We arrived early on Thursday morning.  The visit began with a presentation to over fifty students.  This included discussing some of the main recommendations, and areas to explore further.  For instance, the question ‘What should actually be classed as a benefit?’  Or what would be the impact of payrolling of benefits?  Or how relevant are Flat Rate Expenses in 2013?

Students had previously been made aware of our interim report and had prepared poster presentations to share with the OTS as part of their course.  This led to the presentation transforming into a lively discussion.  For instance, students pointed out that payrolling would have implications for student loan repayments – if this leads to benefits being treated as earnings.  Some argued that many employees didn’t claim Flat Rate Expenses (FREs) because they were not aware the relief existed (and HMRC’s guidance was not easy to find).  Others drew on their own experience of working part time in the care sector – for which they incurred costs such as washing uniform or late night taxies.  After the discussion, students took the lead by talking through their impressive poster presentations.  Some had focused on comparing the UK system with other countries.  Others had focused on analysing specific aspects of the system (such as FREs).

In the afternoon, the aforementioned workshop was held.  Views largely echoed what had been said during other OTS stakeholder workshops.  For instance, the need to clarify the rules pertaining to travel.

Thanks to David Massey from UCLAN for organising the visit – the trip provided valuable insight for our review.  Do you have anything to say about the OTS Employee Benefits and Expenses Review?  Please feel free to comment below, or to email us at ots@ots.gsi.gov.uk.

Workshop held at Number 11 Downing Street on the 18th July 2013

CIMG0311The OTS marked its third anniversary by holding a simplification workshop at No 11 Downing Street, by the kind invitation of the Chancellor. Over 40 attendees, including MPs, senior government officials, academics, tax agents from practice and commerce, and low income representatives took part in a lively debate about issues arising from the OTS’s work.

The Rt Hon Michael Jack, Chairman of the OTS, began proceedings by welcoming attendees. Following on, David Gauke MP, Exchequer Secretary to HM Treasury, described the OTS role as “vital”, and set out its previous successes; including the completion of four major projects, involving seventeen private sector secondees, and over two hundred recommendations, the majority of which were being taken forward.

John Whiting then chaired a discussion on tax simplification, asking those present for their thoughts on the question at the heart of the debate – what’s the best way to continue to simplify the tax system?

A note of the main points made during the discussion is here: Workshop readout (pdf)

What do you think? We’d be very interested in your comments, either by commenting publicly on this blog or by emailing us at ots@ots.gsi.gov.uk

Our new team

OTS standThe OTS team has seen a few changes over the past couple of months. Martin Gunson and Kelly Sizer have now completed their work on pensioner taxation, whilst Sarah Anderson and Tony Page have finished with employee share schemes. A big thank you to all four of them for their effort and dedication in producing their respective reviews.

In their place we have recruited a new team of Theresa Dendy, Tracey Bowler and Suzy Giele to work on our review of employee benefits and expenses. They will be joined by Michael Wilson later in the summer. 

Morwenna Scott has also joined the OTS to work on our tax definitions project. She will work Caroline Turnbull-Hall who returns as a formal secondee having previously worked on our tax reliefs review and the disincorporation relief project.

A new biographies section on our ‘About the OTS’ page has further details on all of our secondees.

Simplification for Canada?

Canadian flagThe OTS is now tolerably well established in the UK. We have tried to keep an eye open for similar initiatives in other countries and develop links where possible. Canada had not featured on the OTS’s map until an approach came for Jeremy Sherwood to speak at a conference on Tax Simplification being organised by the Canadian Certified General Accountants in Toronto. Jeremy was prepared to make the sacrifice and visit Canada, but I played the heartless boss and suggested that a transatlantic trip for an hour’s session didn’t seem that efficient.

Could we perhaps participate in the conference via videoconference? The conference organisers thought that would work – and indeed it would add a real ‘extra’ to the programme. So Jeremy and I put some slides together, sent them off for printing out and found ourselves in one of the video rooms in 1 Horse Guards Road at 5pm one dark December day ready to speak to an attentive group in Toronto.

We spent 20 minutes or so talking through who we are, what we do and how we go about our work. We outlined the projects we had undertaken and were still working on and gave a flavour of the findings and actions that had resulted. The 60+ strong audience seemed to be paying careful attention (we had a good view, slightly oddly from the back of the room) and all seemed to go along well. Any jokes did take time to get a reaction – videoconferencing that far isn’t quite instant!

Questions were then invited and we had a succession of good points to discuss. One particularly interesting thread was the issue of our constitution – who did we report to? (Our reports go to the Chancellor.) Did we have a formal constitution from the government? (No – we are in effect set up through the Coalition agreement but that is not laid down by statute.) What happens if our reports are not taken up? (We naturally hope our reports make sufficient sense for them to be obvious candidates for progress – though we would never expect everything we recommend to be taken up automatically; consultation on anything significant is always going to be needed for a start.)

Overall, this was a constructive (and practical) way to spread the word about simplification. Whether Canada starts work on a simplification project remains to be seen – we sensed there was good support for such an initiative in the conference. If that does go ahead, Jeremy may yet get his transatlantic trip!

The conference report is at http://www.cga-canada.org/en-ca/ResearchReports/ca_rep_2012-12_tax_summit.pdf

John Whiting
Tax Director

A secondee’s experience

IMG_0414 (427x640)The OTS is looking to recruit experienced tax professionals on short-term secondments for its review into employee benefits and expenses. Further details of the role can be found on the vacancies page of our website:

http://www.hm-treasury.gov.uk/ots_vacancies.htm

If you would like to offer input to the employee benefits and expenses review, either in person or via email/telephone, please email the OTS at OTS-Employee.Benefits@ots.gsi.gov.uk

To give a flavour of what it is like to work for the OTS one of our secondees, Sarah Anderson, kindly blogged on her experiences. Over to Sarah:

In July 2011, I rather unthinkingly applied for a position as a secondee at the Office of Tax Simplification. I’d not heard of the OTS at that point but they were looking for people with experience with share plans, particularly with private companies, and it sounded interesting. In addition, the idea of simplifying even a tiny part of the tax code sounded like an excellent idea!

Eighteen months on and I can honestly say that the unthinking application was one of the best things I’ve ever done. For starters, there’s the undoubted kudos of swanning into the Treasury buildings like you belong there and the thrill of bumping into the big guns in the canteen. But even if you’re not as shallow as I am, the experience is one that I’d recommend wholeheartedly.

One of the most enjoyable parts of my 18 months’ secondment has undoubtedly been the opportunity to work alongside the leaders in my industry – particularly the chance to look at life from the perspective of HMRC and Treasury officials. I have always had respect for their experience and expertise; now I have had a greater insight into challenges they face on a daily basis that respect has increased enormously. I hope that one of the positive outcomes of the work of the OTS generally will be to increase trust and understanding between the private sector and HMRC – in the majority of cases, I really believe that our views and objectives are more closely aligned than perhaps we realise.

The experience has sometimes been challenging from a technical perspective. When the OTS produces a report, every single aspect of it is put under the spotlight by various parties: committee members with specialist tax knowledge, HMRC teams with (sadly, too much) experience of tax avoidance opportunities and the broader tax implications, Treasury officials looking at the hidden costs of proposed changes…and, of course, the civil servants always with an eye to the political angle. From the vague, “lightbulb” idea, right through to the precise wording (is it a “charge” or a “penalty”? Does the word “arrangement” have negative connotations?), every point is tested, questioned and argued with individuals who are absolutely the leaders in their field. Sometimes, you lose the arguments. That can, frankly, be terrifying – but like Nietzsche said (or Kelly Clarkson sang, take your pick), “What doesn’t kill you makes you stronger”!

The experience has been frustrating at times, downright infuriating at others, and sometimes the demands can really impinge on your day job. On a bad day, I think that we could, and should, have been braver, making more radical in our suggestions on employee share schemes. But I do believe we have made at least some improvements to the tax advantaged share schemes, and I hope our recommendations for unapproved plans will be accepted and remove some of the existing complexities for companies and HMRC alike. 

The reason I chose to work in this area is because I was given the chance to own shares in my employing company, and saw the difference it could make. So I am also really proud to have been involved an exercise that publicises the concept of employee share ownership. And – sad though it sounds – I am really excited when I see improvements to the share schemes legislation and I can say (to anyone who cares to listen): “I did that!”

Sarah Anderson
OTS Secondee on employee share schemes 

The OTS blog

JW_OTS_bannerThe Office of Tax Simplification (OTS) has been in existence for over two years now and in that time, led by our Chairman Rt Hon Michael Jack and Tax Director John Whiting, we have had a real impact in simplifying the tax system for taxpayers and for HMRC. From small business tax reform to abolishing tax reliefs the OTS has advised the Chancellor on a wide variety of taxes. Our ongoing projects focus on pensioner taxation and employee share schemes; the final reports will be published in early 2013.

In conducting our reviews, the OTS seeks the views of taxpayers, businesses and advisers; as well as government departments such as HM Revenue & Customs, HM Treasury and the Department for Work and Pensions. This blog is a chance for the OTS to interact with all taxpayers on an ongoing basis. We will blog on our current projects, simplification in general and news coming out of the Office.

We hope you will take the time to read and comment on our blog and the work of the OTS.

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