U.K. Treasury Adviser Needs ‘Stronger’ Role: Former Tax Chief

Trust Bloomberg Tax for the international news and analysis to navigate the complex tax treaty networks and global business regulations.

By Ben Stupples

The U.K. Treasury’s tax adviser needs a “stronger voice” on simplifying laws prior to their implementation, according to its former corporation tax chief.

Judith Knott, a former corporation tax leader at both the Treasury and the U.K.’s tax authority, called for the Office for Tax Simplification to play a greater role in the consultations for new tax legislation at a June 12 debate in London.

At a consultation stage, “no one is there pushing against the plethora of changes,” Knott said at the debate, organized by the Chartered Institute of Taxation and the Institute for Fiscal Studies think tank, on the future of U.K. tax simplification.

“There needs to be a counterweight, a stronger voice for simplification inserted into the process, and that seems to be an obvious role for an expanded OTS.”

Existing Powers

Knott’s comments come after the OTS, the Treasury’s independent tax adviser, was granted wider powers under the last government in the 2016 Finance Act.

In line with the act, which gave the OTS a permanent role, the London-based body must conduct a review of specific areas of the tax system at the request of the chancellor of the exchequer, focusing on making existing tax legislation less complicated.

The OTS also has to prepare an annual review on its performance, while the Treasury will similarly conduct a report on the effectiveness of the tax body.

Better Approach

In addition to these duties, involving the OTS in consultations may create a more measured approach to tax policy, Knott told Bloomberg BNA after the debate.

“At the moment, you get people piling in, calling for this tweak or that tweak,” she said. “While each one may be valid in their own right, I think we just need someone, on the flip side, making sure it doesn’t get more and more complex.”

Lawmakers have hindered the OTS’s efforts on U.K. tax policy, largely due to the increasing length of the Finance Bill, reaching a total of 762 pages for this year.

John Whiting, the OTS’s former tax policy director, similarly said at the June 12 debate at the Royal Society of Arts House that the government’s Treasury Select Committee could have paid more attention to the tax body’s published work.

“It would be nice if the Treasury committee would look at the reports the OTS came out with,” he said. “It would be good to get more of a parliamentary push.”

VAT Laws Review

Since it was first set up on a temporary basis in 2010, the OTS has published reports on the taxation of small businesses, and the closer alignment of income tax and national insurance contributions. At the moment, it is conducting a review on value-added tax laws, considering whether they are working appropriately within the U.K’s current economy.

A Treasury spokeswoman said in a June 13 statement that the OTS “plays an important role in the public debate, supporting a simpler tax code and challenging the government to deliver it.”

“To date, we have implemented over 200 of the OTS’s recommendations,” the statement said.

In a June 13 email, a spokesman for the Treasury Select Committee declined to respond to Whiting’s comments, citing the break-up of the committee before the June 8 general election.

Submissions for the OTS’s review of VAT laws close June 30.

To contact the reporter on this story: Ben Stupples in London at bstupples@bna.com

To contact the editor responsible for this story: Penny Sukhraj at psukhraj@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request International Tax