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21 Sep 2016 05:11pm

Osborne has the last laugh

It is somewhat ironic that George Osborne’s legacy – in the shape of the 2016 Finance Act – not only puts the Office of Tax Simplification on a permanent statutory footing but also adds 649 more pages of complex tax legislation to the 11,000-plus pages already in existence

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Caption: Ex chancellor leaves a heavy legacy - 3,896 pages of tax legislation since 2010

In the excitement of running the nation’s finances, the former chancellor had clearly forgotten that in 2007 he had called for a “radical programme of tax reform to make the system simpler and fairer”. And that he had set up the OTS in 2010 to advise the Treasury on how to go about it.

Nine years on from that public call, he has departed for the backbenches and the Northern Powerhouse, leaving the nation (or their tax advisers) to contend with the second longest Finance Act ever.

According to the ICAEW Tax Faculty, only six Finance Acts have been longer than 600 pages and four of them can be laid at Osborne’s door. Each of the four appeared in the last five years, including the longest ever Finance Act, all 687 pages of it, in 2012.

In those five years, the faculty has calculated, Osborne was responsible for 3,896 additional pages of tax legislation.

“Evaluating the number of pages in each Finance Act is a simple, but effective, method of showing the scale of the legislative burden,” said Tax Faculty manager Ian Young.

“This year’s Finance Act is now 649 pages – a far cry from 1979 when it consisted of just 16 pages or the 1950s when 10 years’ worth of Finance Acts came to 625 pages, less than this year’s single Act.”

Young took the opportunity to hit out at the fact that the 2016 Act was hurried through parliament without proper scrutiny. This had added to an unnecessarily long and complex Act.

“At a time when UK business is faced with economic uncertainty following the EU referendum results, the government is failing to support businesses, by failing to simplify tax,” he said.

“A simpler tax system will reduce the burden on business by making legislation easier to comply with.”

He may be pleasantly surprised come 23 November and the Autumn Statement. The current chancellor, Philip Hammond, has been travelling around the country holding discussions with businesses to hear their views on what actions he can take to support economic and wage growth.

Those at the meetings have come from a cross section of business groups, including the CBI, FSB and BCC, and chairmen or chief executives of companies like BMW, British Airways, Sainsbury’s, TSB and Shell UK and Ireland.

Commenting after the most recent meeting, which was held today (Wednesday), Hammond said, “These discussions have been an excellent way to hear the views of large and small businesses, specialising in a range of industries and from all over the country, ahead of my first Autumn Statement.”

Julia Irvine

 

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