Autumn Statement 2016: Demand for simplification of taxes

A new survey asked taxpayers what the Chancellor can do to support them on Autumn Statement day.

Some 78 per cent of taxpayers say that elements of the UK tax legislation system are unfit for purpose, that it undermines credibility in the eyes of the general public and places an unnecessary burden on UK individuals.

Furthermore, 62 per cent of respondents say that HMRC resources should be dedicated to achieving simplification in the tax system, according to a study by Crowe Clark Whitehill.

Cutting red tape and reducing compliance time is seen as the major area that the Chancellor should focus on in the Autumn Statement.

Laurence Field, head of tax at Crowe Clark Whitehill says, ‘The complexity of the tax system is a key concern for many businesses and individuals.

‘The vast majority of taxpayers are committed to paying the right amount of tax at the right time, but are concerned that inadvertent errors can lead to long discussions with HMRC and hefty penalties.’

Drowning in tax legislation

The UK has over 17,000 pages of detailed tax legislation, while Hong Kong gets by on 276, Field points out, showing that a sophisticated economy doesn’t require acres of tax legislation.

‘In fact, 78 per cent of those surveyed think the UK’s tax system is unfit for purpose. People want simplicity and fairness; however the more recent changes to the tax system do not reflect that. An overwhelming proportion of our respondents feel that this is where resources should be targeted.’

Tom Elliott, head of private clients at the company, says there is great emphasis on taxing earned income rather than capital growth.  ‘This is probably because our client base feels that wealth is often created from income that has been taxed already.

‘There is also significant support for ensuring the UK is an attractive place for foreign individuals to live and invest. Will this still be the case following the changes for non UK doms post-April 2017? If the answer to this is ‘no,’ perhaps the Chancellor should rethink those changes in the Autumn Statement.’

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