Taking stock of the Chancellor’s Pre Budget Report, The Chartered Institute of Taxation, CIOT welcomed many of the changes. However, the CIOT regretted that more was not done to simplify the administrative burdens the tax system imposes on business as some compensation for the increased national insurance contributions they face from next April. Press Office: Viv Rees, Head of Communications, Office: 020 7235 9381
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Taking stock of the Chancellor’s Pre Budget Report, The Chartered Institute of Taxation, CIOT welcomed many of the changes. However, the CIOT regretted that more was not done to simplify the administrative burdens the tax system imposes on business as some compensation for the increased national insurance contributions they face from next April.
Penny Hamilton, CIOT President said:
“We have called in the past for annual changes to the tax system aimed solely at simplification. This was also called for by the House of Commons Treasury Committee’s report in July this year. We still maintain that these are necessary, in addition to any Government sponsored business support.
“ Whilst we recognise the constraints that the Chancellor is under, he has missed the opportunity to help businesses by simplifying the tax and national insurance systems. The increased financial burden of a higher national insurance charge from next April will impact on business and simplification could ease matters by reducing administration.”
The CIOT welcomes the approach to many of the changes to effect these by consultation and looks forward to participating in meaningful discussions and answering questions such as:
- Environmental taxes – will the projected landfill tax rises be effective or just a burden on business?
· Pensions – there are eight different tax regimes for pensions and this creates unnecessary complexity and confusion. People need to be able to understand the tax regime that surrounds their retirement planning – will the Chancellor’s talk of “simplifying radically” the regime be carried through without “rounding down”?
· Corporate tax reform – the reform discussions are to continue. The imminence of major changes to the accounting standards governing company account with a move to IAS means that moves here need to be handled carefully – but can we at least progress some of the necessary simplifications in the system?
· Employee Benefit Trusts – we understand the Chancellor’s desire to block perceived abuses, but can restrictions be properly targeted so as not to harm the normal use of such schemes?
· VAT – how will the new approach to “Protecting Indirect Tax revenues work in practice? Is this going to impose additional burdens on the vast majority of businesses who try to carry out their tax responsibilities honestly and carefully?
· Enterprise – can the new measures to encourage enterprise make a difference? Would the better route be to vigorously attack the red tape that can affect the new business, particularly as it starts to employ staff? Penny Hamilton continued:
“We always welcome a commitment to consult on tax changes. In this context I would reiterate our proposal for a formal oversight body for the consultative process to ensure these are carried through properly and effectively. Our Tax Practice Committee idea is ever more relevant.”
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