The Chartered Institute of Taxation, CIOT, is calling for a reduction in the tax burdens on employers in a paper on employer/employee tax issues. The paper is the latest in a series of “Quick Wins”
on tax simplification that the CIOT has submitted.
John Whiting, the CIOT’s immediate past President and a PricewaterhouseCoopers partner, said:
“Simplification of our current PAYE and NIC system would radically help companies with the rapidly rising administrative costs of payrolls. If Government wants to help business grow, trimming this area of red tape would be a great place to start.”
Amongst the 10 short term ideas in the paper for tax simplification are streamlining of the pension scheme approval process, tax exemptions on support for employees with special needs, the exemption of income tax and NIC for employees’ overseas medical expenses, a rise in the limit from £8,000 to at least £20,000 before tax is paid, (or ideally a total removal of the tax), when your job demands a location move, tax exemption for reasonable meals provided by companies, for example canteen meals for early morning and shift workers and that the 15p/day luncheon vouchers should be either scrapped or updated.
The paper goes on to give a number of long term ideas for simplification. One key idea is that PAYE and NIC should be integrated; the CIOT believes that if there is the political will to do it, it can be done.
According to John Whiting:
“There is a need to review, update or better integrate old limits and legislation. Currently all we are seeing is layer upon layer of ill-fitting legislation that is causing confusion and imposing additional administrative costs on companies.”
“The latest e-filing security errors are just one more example which demonstrates that changes are not being properly carried through. We welcome e-filing, but it must be easy and attractive to use. Employers need to be incentivised to use it. There should be sharing of the cost benefits rather than the imposition of penalties of up to £3,000 for non-compliance.”
The Employer/Employee Quick Wins paper is the fourth in a series of papers that have so far covered personal tax, corporate tax and indirect tax. They identify areas where change would:
be revenue neutral
have few winners and losers
be easy to implement
simplify administration or eliminate unnecessary technicalities.
For copies of the papers visit www.tax.org.uk or call the press office on 020 7235 9381.
NOTE FOR EDITORS:
The Chartered Institute of Taxation (CIOT) is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT deals with all aspects of direct and indirect taxation. Its primary purpose is to promote education in and the study of the administration and practice of taxation. One of its key aims is to achieve a better, more efficient, tax system for all affected by it - taxpayers, advisers and the authorities. The CIOT’s comments and recommendations on tax issues are made solely in order to achieve its aims: it is entirely apolitical in its work. The 12,000 members of the CIOT have the practising title of “Chartered Tax Adviser“.
The Institute was established in 1930 and received its Royal Charter in 1994. It is a United Kingdom member of the Confédération Fiscale Européenne (CFE), the umbrella body for 150,000 tax advisers in Europe. As part of its charitable activities, the CIOT also sponsors the Low Incomes Tax Reform Group which works to improve and simplify the tax system so as to make it more responsive to the needs of those who cannot afford to pay for tax advice.
Contacts: John Whiting, CIOT Past President, Tel: 020 7804 4422;
Mobile: 07710 027 595
Press Office: Viv Rees, Head of Communications, Tel: 020 7235 9381
12 Upper Belgrave Street
London SW1X 8BB
Tel: 020 7235 9381
Fax: 020 7838 9958