Tag: tax simplification

Making tax digital, HMRC guidance and the tax gap

A key aim of the Making Tax Digital service is to ‘close the tax gap due to errors with people making their VAT returns’, according to HMRC. An alternative – and perhaps better – way to deploy technology to improve compliance is set out in an Office of Tax Simplification report. Better HMRC guidance, the OTS says, is likely to lead to more accurate tax reporting and ‘help to close the tax gap, as taxpayers should have a better understanding of HMRC’s view of the law’. Read more:

My article for Accounting and Business January 2019, published (free to view) by ACCA.

Taxpayers invited to contribute to small business tax review

The Office of Tax Simplification wants to know about the everyday experience of smaller businesses, including the self-employed, and especially those who “struggle with tax”.

In a consultation that closes on December 7, the OTS invites responses to an online survey as well as a more detailed call for evidence. “The inherent complexity and challenges faced by smaller businesses in their everyday affairs means that some find tax and other regulatory requirements difficult to manage,” it said.

The OTS wants to hear from businesses and their advisers about which parts of the system are most complex and “hard to get right”, and invites suggestions for improvement.

A personal tax roadmap would help address complexity, says OTS

Misunderstandings remain about UK taxation of savings income, but a personal tax roadmap would help address its significant complexities, the Office of Tax Simplification said last month.

A range of tax reliefs to encourage saving works well for most taxpayers, and 95 percent of people pay no tax on savings income, the OTS said. But the interaction between rates and allowances is so complex that HMRC’s self-assessment computer software has sometimes “failed to get it right,” the OTS pointed out in a 50-page report titled Savings Income: Routes to Simplification.

My news story of May 29 for Tax Notes (paywall) is now reproduced in full with permission: U.K. Office of Tax Simplification Calls for Personal Tax Roadmap (pdf).