tiintax

It’s that time of year again: the Budget is over but the summer recess isn’t quite upon us yet.  A good time for publication of consultations for some of the more, er, challenging ideas the government has in its bottom drawer.  If you go to gov.uk and search on today’s date you’ll see the following new consultations are out there from today.  And some are further out there than others!

1. Set up a rival Revenue and Customs body.  Like the old joke about “how come there’s only one Monopolies commission?”, it has long been argued in certain quarters that HM Revenue and Customs would benefit from the injection of a little competition.  Well, now you have your opportunity to comment on the proposals.  Once HMRC retreats into its 13 redoubts, the proposal is to ask a couple of venture capitalists to provide the start up funds for new networks of tax offices and customs centres, based on the schools academy proposals.  The idea is that a local tax office would be part of a chain of offices owned by (say) Richard Branson or Lord Sugar.  Tax customers would then choose whether they wanted to pay the standard HMRC tax, the Sugar Tax (where all the tax rates would stay the same except for the one on Sugar, obviously) or the Virgin Tax, where apparently there would be spectacular savings for certain taxpayers who could pass some rather stringent conditions.
2. Tax competition.  It has long been a government ambition for our country to be a place which is seen as “open for business”: where multi-nationals want to base their headquarters because the tax rates are low and the tax authorities are sympathetic souls who will understand.  The government now wants to extend this to individual taxpayers.  Tax competitiveness is for the many, not just for the few, is the slogan out front of some rather interesting proposals.  Essentially anyone with income over £50,000 a year will be eligible to register to vote in any constituency, not just the one in which they happen to reside.  They will be taxed on their income, using the Scottish Income Tax model, on a variable rate depending on their constituency.  Constituencies will be able to offer competitive tax rates via a new organisation led by Lord Gerry of Mander which will assess the likelihood of new voters changing the balance of power, although I have to say it is not entirely clear from the consultation document whether altering it is considered a good or bad thing!
3. Tax simplification.  There’s a rather interesting proposal from the Office of Tax Simplification that would reduce the length of the tax code considerably.  In essence, it’s a new application of the “one in, two out” principle that applies to regulatory measures.  How it will work for tax is, however, quite markedly different, if the proposals are legislated in accordance with today’s consultation.  The lead proposal is to cap the tax code at its present length and reduce it by two pages for every page of new legislation introduced.  The clever part, however, is that the creeping repeal of existing legislation is done on a very simple brute-force basis.  If a Finance Act adds one page of new legislation to the “end” of the tax code, it simply repeals the first two pages from the “front” end.  If each new Finance Act introduces no more than fifty pages of new legislation at a time, the entire tax code will be down to nothing by 2356!