The President of the Chartered Institute of Taxation (CIOT), Vincent Oratore has on behalf of the body welcomed the government’s
publication of nine discussion and consultation documents relating to
tax.
Commenting on the release of the discussion papers, Oratore stated: “We welcome the new government’s
commitment to meaningful consultation on tax issues. This is more evidence of
the willingness of the administration to listen to the concerns and suggestions
of the tax profession and work with us to produce a more efficient tax system.”
He added: “The government’s objective of simplifying the system and reducing
burdens on business and individual taxpayers is one that the CIOT shares. The
more comprehensible the tax system the more likely it is to command public and
business confidence and the more likely taxpayers are to get their tax right.”
Oratore said that the review of the proposed changes to pensions tax relief is "especially
welcome."
"We all understand that pensions tax relief is going to be curtailed,
but that there has to be a simpler way than the complex and costly system previously
legislated for," he noted. "A cut in the annual contribution limit would be a simpler and
more pragmatic way forward.”
The CIOT also welcomes the discussion document on improving the operation
of the PAYE (pay-as-you-earn) system. "It seems to acknowledge many of the problems with
the PAYE system that we and other bodies have long highlighted and offers the
opportunity of real change to a system that, for all its merits, is creaking
badly and imposing too many burdens on employers," he observed. "The prospect of changes that,
for example, largely eliminate P45/46 problems, mean tax codes are far more
up-to-date and offer the possibility of streamlining tax credits and benefits,
is very appealing.”
“Although the proposed Centralised Deductions option offers some real
opportunities for change, the CIOT will be pressing for adequate safeguards
for taxpayers to ensure that they are treated fairly in any new system,” Oratore added.
The CIOT also welcomed interim proposals to improve the controlled foreign companies (CFC) regime, but doubts whether full reform of CFC rules can be agreed and completed by spring 2012, as the
government intend.
“The objectives for the reformed CFC framework must be greater certainty,
lower compliance costs and a more competitive business environment,” Oratore said.
Oratore lauded the discussion document on taxation of foreign
branches of companies, stating: “This is a hugely significant area for banks, insurers and energy companies
and a welcome step forward in achieving a level playing field for foreign profits.
However putting together a tax regime which enables British players in these
industries to be competitive internationally and resolves the issues identified
will be a big challenge for the government."
Oratore observed that the proposal to amend rather than abolish the furnished holiday lettings regime
will be welcomed by many property owners who would be relieved of the need to
convince HMRC that they are running a property business. "The proposed ending
of loss relief will hit some owners, however we appreciate that any rules going
forward must be affordable,” he added.
LAWANDTAX-NEWS.COM
