Plea to end tax system ‘tinkering’

Published: Friday 13th March 2015 by The News Editor

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Party political tinkering with tax around general elections has made the UK’s system complex and unpredictable, according to the world’s oldest professional body of accountants.

The Institute of Chartered Accountants of Scotland (Icas) has called for a longer-term vision for the UK tax system to give certainty and stability for individuals and businesses.

It has produced a manifesto ahead of the general election in May, challenging all political parties “to stop the relentless tinkering and short-term approach to changes in the UK’s tax system”.

Elspeth Orcharton, Icas director of tax, said: “With tax so much in the public mind at present, it’s time for politicians to offer clear commitments on how they would make tax simpler for everyone in the UK.

“Politicians need to make the hard choices – increase or reduce the tax rate burden if needed in the simplest way possible, but avoid new reliefs and taxes.

“The reason we have such a complex tax system is that political parties just after, then just before, a general election make promises to voters. We may never change that but please keep the focus on easy and simple changes.”

The manifesto, entitled Counting On Change, calls for the Office of Tax Simplification to be maintained and strengthened after the election.

Post-election policies should provide clear long-term strategies for the tax system, removing “distortions” in taxation between incorporated and unincorporated businesses and “inconsistencies” between employment and self-employment tax outcomes, it said.

Following the Autumn Statement, which included five separate announcements on VAT in the public sector, Icas has also challenged parties to end the “piecemeal approach” to VAT management and recovery – and for the future government to provide support models for the efficient delivery of public services.

Consideration also needs to be given to the impact, and perhaps unintended consequences, of devolution of income tax rates and bands to Scotland, Icas said.

Published: Friday 13th March 2015 by The News Editor

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