The latest work of the OTS is set out. A number of changes to OTS Board were also announced recently. The Northern Ireland Tax Committee met with the OTS last month; items on the agenda included the current work streams of the OTS and complexity within the UK tax regime.

Guidance for taxpayers: a vision for the future

The Office of Tax Simplification recently published a report setting out its strategic vision for the future of guidance for taxpayers and their advisers.

In this report, the OTS takes a strategic look at the general approach to providing guidance for taxpayers. Although guidance has featured in many previous OTS reports on particular parts of the tax system, this is the first time the OTS has devoted an entire report to this important area. Interestingly the OTS does not use HMRC’s term of “customers” when referring to taxpayers.

The report calls for HMRC to make transforming the user experience a sustained priority, building on its current programme of work in this area, giving greater emphasis to meeting the needs of taxpayers, making it easier for people to find the guidance they need and to be clearer what reliance they can place on it.

OTS business lifecycle review call for evidence and survey

The OTS also published a call for evidence and an online survey to seek views about tax as it impacts on businesses.

In this review, the OTS is interested in the everyday experience of business owners and managers as they engage with tax throughout the lifecycle, from start-up and registration, through calculating and paying tax, to business closure/transfer.

The review will focus mainly on smaller businesses, including self-employed individuals. It follows an earlier business lifecycle report on areas such as raising capital and disposing of a business.

Small and medium sized businesses play a key role in the UK economy. In 2017–18 they employed 16 million people and paid £155bn in tax (25% of all tax paid). The inherent complexity and challenges faced by smaller businesses in their everyday affairs means that some find tax and other regulatory requirements difficult to manage, and the review aims to identify ways to make tax simpler, fairer and better for those businesses.

The OTS wants to hear directly from businesses as well as professional advisers and representative bodies about which parts of the tax system are particularly complex and hard to get right, and to hear any suggestions for improvements.

Inheritance tax review

Following a request from the Chancellor of the Exchequer in January 2018 the OTS is undertaking a review of inheritance tax covering a wide range of both administrative and broader technical aspects. In its first report, published on 23 November 2018, the OTS commented “the review has attracted an unprecedented level of engagement, both from advisers and the general public” with over 3,500 responses, which is understood to be far more than for any of its previous reviews.

The first report focuses on the day to day administrative concerns with the key recommendation for the Government to give renewed consideration to digitising and simplifying the necessary administration. A second report will be published in Spring 2019 which will explore complexities and ‘key technical and design issues’.

Many of those who responded told the OTS that, at what is such a difficult time, they felt they were being asked to fill in complicated forms even where the relative who had died had only left a small amount.

The first report highlights the benefits of:

• reducing or removing the requirement to submit forms for smaller or simpler estates, especially where there is no tax to pay;
• simplifying administration and guidance;
• the advantages of banks and other financial institutions having standardised requirements; and
• automating the whole system by bringing it on-line.