Tue, 1 Mar 2011

Exchequer Secretary pledges simpler taxes

The Government has reiterated its promise to simplify the tax system and end the ‘constant tinkering’ that it said it had endured under the previous Labour administration.

Speaking to the Financial Executive Network Group in London at the end of January, David Gauke, Exchequer Secretary to the Treasury, promised ‘a simpler, more stable tax system… with fewer exemptions and fewer reliefs’. Decrying the increasing complexity of the tax system under the previous Government, Gauke remarked: ‘It got to the stage where Tolley’s began using a smaller font in a fraught bid to keep down the number of pages [in its tax guides].’

He continued: ‘We also witnessed the introduction of two fiscal events for every financial year: a Pre-Budget Report that carried just as much weight as the Budget – each one jam-packed with tax amendments.’

In autumn 2009, Gauke told the Payroll World conference that the Conservatives, now part of the coalition Government, are committed to the ‘Lawsonian’ principles of simple, flat tax rates, rather than using the system to try to fine-tune behaviour.

The new Office for Tax Simplification, set up by the coalition Government, is conducting two reviews: one on simplifying small business taxation, and the other on tax reliefs. Finance Bills will be subject to consultation from business, and Gauke emphasised the importance of feedback received.