The new Office for Tax Simplification won’t turn the UK into a low-tax state
ANOTHER week, another independent body that could prove a headache for the chancellor. Hot on the heels of the creation of the Office for Budget Responsibility (OBR), which has had a less than illustrious start, George Osborne will today launch an Office for Tax Simplification. It has been charged with lighting a bonfire under Britain’s 11,000 page tax code.
Compared to the OBR, the OTS will be a relatively toothless creature. It will identify areas of undue complexity in the tax system, and offer advice on how to make them simpler. And it will work with HMRC when new taxes are being drawn up, to ensure that the needs of businesses are taken into account.
Of course, advice is just that: Osborne will be able to ignore it if he wishes, although that could prove politically embarrassing. At any rate, the independence of tax director John Whiting – a much-respected figure in the City – is not in doubt, although the same can’t be same for Michael Jack, a former Tory MP.
Aides to the chancellor say the OTS proves he is serious about putting an “Open For Business” sign above the UK, after he pledged to cut corporation tax by 1p for the next five years. But in truth, this is about tidying up around the edges. Deficit-laden Britain is not going to become a low tax economy any time soon.