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A new, simple, revenue neutral tax code

The ever increasing complexity of the tax code creates uncertainty for businesses and encourages tax avoidance, warns leading tax expert David Martin in a new report A New, Simple, Revenue Neutral Tax Code for Business, published by the Centre for Policy Studies on Monday 7 March 2016.

  • Since 2009, the word count of Tolley’s Tax Handbooks has increased by approximately 5 million words and now stands at around 10 million – it now has over 12 times as many words as the King James Bible (783,137 words).
     
  • As a result tax advice services are at a premium – the report revealing that top tax advisers in the UK can charge up to £1,000 per hourThis is a higher figure than almost all overseas tax advisers – with the possible exception of the US, where there is a tax code which is almost as over-complicated as that of the UK. 

The rate of growth in the tax code is unsustainable. But there is an alternative. The Government must act to simplify the tax code. To this end, David Martin proposes a new Business Tax Act, one eighth as long as the current law for business, having a comprehensive tax base, eliminating unnecessary rules, and providing less scope for avoidance.

The reform would enable ordinary businesses to understand the tax law that applies to them, reducing their compliance burdens and saving expense. It would also free up time for HMRC to have proper contact to deal with taxpayers’ concerns and issues and pave the way for an efficient and free service for a tax tribunal to resolve outstanding disputes.

David Martin explains:

"The UK tax code for business is a complex and impenetrable assembly of piecemeal rules, accumulated over decades without having any overall review.  

Rather than correcting defective legislation with specific measures, the Government has now decided that taxpayers should identify ‘the spirit of the law’ – so not only do we have an extraordinarily long tax code but taxpayers can no longer rely on what it actually says. Taxpayers can be intimidated by penalties from pursuing a tax appeal, and may be required to sign up to new codes of conduct, policed by HMRC. 

Such developments, together with the lack of taxpayer safeguards, are further proof that we need a proper, comprehensive and simplified tax code." 

Tim Knox, Director of the Centre for Policy Studies, comments:

“Whatever success George Osborne has achieved in reducing the budget, the size and complexity of the tax code has continued to grow since he took office. This trend is unsustainable. David Martin’s proposals present a simple and effective new tax code that would greatly reduce both overall complexity and opportunity for exploitation.”

Click here to see the proposed tax code reform and to read the full report.

Media Impact: 

David Martin - Monday 7th March 2016

David Martin enjoyed a career spanning 23 years as a tax lawyer within a large City Law Firm, latterly as Head of the Tax Department, before taking early retirement in 2002. During that time he advised both company and individual clients. He now lives a less pressurised life in Devon with his wife and two daughters and maintains an active interest in tax law.