Tax reliefs under the spotlight
The government may be looking at cutting down on the number of reliefs and allowances available under the current tax system.
The Office of Tax Simplification (OTS), which was set up by the coalition government, to investigate creating a more streamlined and less complex tax system, has identified some 1,042 reliefs and allowances.
The list will be submitted to the government in order to see which can be amended or dropped altogether in next March’s Budget.
According to the review, there are 87 different reliefs offered to those paying inheritance tax. There are also over 200 different income tax allowances as well as a range of antique tax exemptions that date back to long vanished economic eras.
Compiling the list has taken almost three months to complete.
John Whiting, who is a member of the OTS, said: “I am sure some people will be surprised by the sheer number of reliefs in today’s tax system.
“Many have a clear and highly valued benefit so clearly we would not seek to change those. Others, however, may simply no longer be used, or are too complex and burdensome to be properly effective, so it is these that I want my team to focus on.”
The brief of the review is not specifically to boost the tax take but to introduce a more consistent and easier-to-understand regime.
The Tax Reliefs Review Committee will produce an interim report on those allowances that are anomalous or random or out of step, with a final report going to the Treasury ahead of next year’s Budget.
The decision or otherwise to amend or abolish reliefs will be based on the cost of administering the breaks, how widely used they are and the complexity of the legislation involved in enabling the relief.