The Office of Tax Simplification (OTS) has published its final report on its Review of the Competitiveness of the UK Tax System. The review, announced at last year’s Autumn Statement, has focused on how the UK might improve the competitiveness of its tax administration system, with particular reference to the World Bank’s “Paying Taxes” survey.

The report concludes that “the UK undoubtedly has a competitive tax system” which “results in a creditable 14th place” in the World Bank’s survey. Ireland is placed 6th in the survey.

In summary the reports key recommendations are:

• Review the rules for the basic corporation tax/income tax computation to align more closely accounting and tax profits and eliminate many sundry adjustments;
• Consider replacing capital allowances with allowable depreciation; and test whether corporate capital gains can be largely abolished.
• Tax businesses on business profits rather than streaming trading and investment results. Review debt cap and transfer pricing rules to test their effectiveness and reduce the burdens they impose.
• Harmonise income tax and NICs and integrate as much as possible.
• Review HMRC’s Real Time Information process particularly around ‘on or before’.
• Extend short term business visitor rules and easements.
• Develop ways of giving greater certainty over VAT treatment for smaller businesses.
• Build on the success of HMRC’s Customer Relationship Managers by extending the coverage as far as financially viable.
• Improve the assistance given to businesses, particularly through greater use of digital communications channels.
• Consider streamlining tax payments through a single tax account.