Chancellor of the Exchequer George Osborne this morning announced the creation of the independent Office of Tax Simplification (OTS), designed to provide the government with advice on simplifying the tax system.

Osborne said of the new body: “Two years ago I promised to create the Office of Tax Simplification. Today, we’re delivering on that promise. With its independent, expert advice it will be a permanent force for a simpler tax system.”

 

The office has two interim board members: Michael Jack is chairman and John Whiting is tax director. Jack was Conservative MP for Fylde from 1987 to 2010, and served as financial secretary to the Treasury from 1995 to 1997. Whiting was appointed as the first tax policy director of the Chartered Institute of Taxation (CIOT) in 2009 after working for PricewaterhouseCoopers (PwC) for 25 years.

 

Jack and Whiting are to lead the office on a voluntary, part-time basis. Permanent appointments will be made through an open competition in early 2011.

 

Speaking about the new office, Jack said: “Entrepreneurship should never be stifled because of an overly complex tax system. That's why I am delighted that the government have committed themselves to looking at ways to simplify the tax system, with an initial focus on small businesses.”

 

Whiting said: "I've long argued that we need a simpler tax system in the UK, so I'm delighted to be given the opportunity to take forward the government's commitment in that direction.”

 

The OTS will be based in the Treasury and staffed by civil servants from the department. It will also draw on outside expertise to write two reviews this year, focusing on tax reliefs and small business tax simplification.

 

For the review of tax reliefs, the office has been commissioned to review all reliefs, allowances and exemptions within the taxes and duties administered by HM Revenue & Customs. An interim report is to be published by late autumn 2010 and a full report is to be published before the 2011 Budget.

 

The small business tax review is to include looking at alternative legislation for I35, intermediaries legislation introduced in 2000 which seeks to prevent tax avoidance by firms who pay clients through an intermediary. The OTS will be asked to make specific recommendations on this, and on simplifying taxation for small businesses.

Written by Joshua Chambers