Budget March 2011: Simplifying the tax system
Wednesday 23rd March 2011
Ahead of the 2011 Budget, the Office of Tax Simplification (OTS) published its final recommendations for reforming the UK’s tax system.
The OTS, which was tasked with conducting a review of the UK’s tax relief system, has identified 47 reliefs which it says should be abolished and 17 which need to be simplified. It proposes that a further 37 reliefs should be examined in greater detail.
The report recommends the abolition of tax-free luncheon vouchers and relief on late night taxis. Others identified for removal include trade union subscriptions and the business premises renovation allowance.
Among those it suggests simplifying are: Entrepreneurs’ Relief; principal private residence relief; real estate investment trusts; and the enterprise investment scheme. The OTS also called for a wholesale review of inheritance tax and capital gains tax.
In the Budget, the Chancellor agreed to abolish 43 ‘complex reliefs’ but the most significant announcement for the long-term was the Government’s intention to consult on the possibility of ‘merging’ national insurance and income tax in future years.