Firms say new tax watchdog needs teeth
BUSINESSES yesterday gave a warm welcome to the launch of a new body charged with stripping the fat from Britain’s bloated tax code, but warned it would need teeth to take on the Treasury.
The chancellor launched the Office for Tax Simplification (OTS) yesterday morning, and said one of its first tasks would be to “cut through the thickets of reliefs that have grown up under years of ministerial meddling”. It will also review small business taxation, including the much-hated IR35 rules that govern the self-employed.
Former PricewaterhouseCoopers partner John Whiting will become interim tax director while Michael Jack, the ex-Tory MP, will be interim chairman. Yesterday, both said they would be interested in taking permanent positions at the OTS when their initial one-year term is over. The pair will be joined by a four-man board and a small secretariat of six or so officials.
The British Chambers of Commerce cheered the “long overdue response to the relentless chop and change of tax law” and said the OTS was right to focus on rules governing small businesses.
The Institute of Directors said the OTS was an “excellent idea”, but warned there were “concerns about its independence”. It said it feared the office “may be gently steered away from topics ministers might find challenging” because two of the four board members will be supplied by the Treasury and the Revenue.
Lord Forsyth, the Conservative peer who first recommended the creation of an OTS in 2006, warned the body would need to act “robustly” because “ministers are always tempted to complicate the tax system as demonstrated with the hike it capital gains tax”.
And he criticised the government for failing to set up a joint Lords and Commons select committee on taxation, another key recommendation of Forsyth’s 2006 Tax Reform Commission.
“It would be a shame not to tap into the business and tax expertise that exists in the Lords,” said Forsyth.