Tag Archives: tax complexity

Morwenna’s leaving the OTS, here’s what she had to say…

OTSI’m now coming to the end of my time with the Office of Tax Simplification. I arrived six months ago not knowing what to expect. During my time here I have been privileged enough to work with professionals who are experts in their fields to develop an interesting paper on definitions.

I have been working on the Definitions Project, which is an arm of the Complexity Project. Initially we started with the aim of creating a list of all definitions within tax legislation; it soon became apparent that this would not be attainable in the limited time frame available. Instead we have developed a paper which encompasses general discussion surrounding definitions as well as suggestions on how to create a better system for the future. If you are interested in this area here is a link to the paper:

https://www.gov.uk/government/publications/definitions-in-tax-legislation-and-their-contribution-to-complexity

There have been a number of aspects to my position. I have read a lot of legislation and pulled out over 2000 definitions from a number of Acts. As well as this I have had many opportunities to develop my knowledge base and get a deeper understanding of the tax world. A highlight has to be meeting with Elizabeth Gardiner from the Office of the Parliamentary Counsel and Alice Pilia from the Cabinet Office. It was interesting to understand and appreciate the ways in which legislation is drafted and the process behind this, more about this is discussed in the paper.

I hope you enjoy reading the paper as much as I have enjoyed putting it together, if you have any comments please do not hesitate to email the OTS by clicking here.

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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.

Go anywhere and meet anyone…

Motorway lights

The title of this post has become the unofficial OTS motto. In the past we have been as far west as Toronto (see previous post) – Belfast in person – as far North as Aberdeen, South to Exeter, East to Norwich and most places in between. It is now that time of year again and we are looking forward to getting out and about to hear the views of businesses, individual taxpayers, advisers and HMRC alike.

Our review of employee benefits and expenses is now in full swing – we have a team of secondees in place and are starting to plan meetings with interested parties across the UK. This is (hopefully) where you come in.

If you have an interest in the review and would like to feed input into it please contact us at the following email: ots-employee.benefits@ots.gsi.gov.uk We welcome any comments you can make or we will be happy to travel to meet you – especially a local group of businesses or other interested parties –  or welcome you to our offices in central London.

Please note that we only have a small team and whilst we will try to get around as many groups as possible we can’t commit to meet everyone.

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

Comments on our complexity index

Finance Act 2012Following the publication of the OTS complexity index methodology we have received several responses which the authors have kindly allowed us to reproduce here. We are very pleased that the index has helped spark debate and as we look to refine the methodology over the coming months we welcome further views on our approach. Please email us at ots@ots.gsi.gov.uk if you would like to contribute.

 The first response is from Professor David Ulph of St. Andrews University and a former head of HMRC’s analysis unit. His paper provides an excellent discussion on the concept of complexity and how to measure it. Professor Ulph also provides a useful critique of the OTS methodology which we will be looking to refine over the coming months.

Professor David Ulph – Measuring tax complexity

The second response is from Richard Baron of the Institute of Directors (IoD). Richard gives a critique of the criteria in our index and raises some interesting questions about the validity of several of them. Richard also comments on our weighting methodology and whether these should be subjective, arguing that they should not. He also questions whether we could ever get to a ‘robust’ measure of complexity and whether we should really only use the index to spark and stimulate debate.

Richard Baron – The OTS complexity index 

The third response is from one of the members of our Consultative Committee for the Employee share schemes review, David Pett of Pett, Franklin and Co. David’s argument is that simplifications that level the playing field for smaller taxpayers should be given more weight, even if they increase the length of legislation. Larger taxpayers shouldn’t benefit from the tax system just because of their size and ability to pay for better advice.

 David Pett – Tax Complexity

Tax thresholds

ThresholdsWe like counting things in the Office of Tax Simplification. It’s a way of getting a handle on what a massive task tax simplification really is, and helps give us a better idea of where we should direct our efforts. In 2010, we counted up all the tax reliefs in the UK and ended up with a figure of 1,042. Earlier this year, we counted the total pages of tax legislation  17,795  and then counted how many were left when you took out repealed legislation, obsolete rules and duplications  6,102.

Now we have counted the number of monetary tax thresholds, ceilings and other figures in tax legislation – everything that is expressed in pounds or pence (or fractions of pence). We got the idea from our reliefs review, where we found some numbers that hadn’t been changed for many years, but others that were updated pretty regularly. We wanted to explore this further, and see if we could come up with any general themes or lessons for tax simplification.

The paper we are publishing today is the result of this work. It didn’t take long to put together – two or three weeks’ work at most, over the past 3 months. It was a relatively quick job to skim through the 17,795 pages of tax law to list the figures, but rather harder to trace each one back through successive Finance Acts to see when they first appeared and how often they changed since.  We haven’t asked HMRC to check the accuracy of the list, so it comes with a bit of a health warning and if you do find any mistakes, please do let us know.
We hope the article and spreadsheet will be of interest, and not just to tax nerds like me.
 

Tax thresholds paper

List of numerical thresholds in tax legislation

Jeremy Sherwood, OTS Secretariat

P.S. Our next big counting job is to list and analyse all tax definitions, and we are recruiting a postgraduate student to help us do this – see the OTS vacancies page.

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