The Great Simplification ActApril 1, 2017
As we are all now aware, there will be a Great Repeal Bill to sort out the complexities of the interaction of EU and UK law as part of the process of Brexit. Basically a short bill that says something like “all EU law is now transposed into UK law” and then donkey’s years of statutory instruments and faffy-about bills to un-transpose the bits we don’t want.
Sources tell me that, since we’re doing a big sort out anyway, the government has decided this is the ideal time to sort out tax simplification once and for all.
VAT is the obvious example: fiddly rules to distinguish food from, well, recreational food (whether a jaffa cake is a cake or a biscuit for instance) will be incorporated into UK law in the Great Repeal Bill and then quietly squashed in some nicely boring SI that no-one except the really serious policy wonk will bother even to read.
So the Great Repeal Bill is likely to include a footnote which says “*and all tax law” so that HMRC can quietly sort out this tax simplification thing in a series of SIs that go through on the nod while parliament is getting itself into a lather over the Brexit stuff.
My sources tell me the ultimate shape of the tax system after the legislative process has run its course is likely to be rather similar to the Unitary Tax proposals which were put forward a couple of years ago but never found their way into legislation, although there are some suggestions that tax competitiveness will require business taxes to be aggressively lowered with compensatory aggressive increases in personal taxes. However a further roll out of Making Tax Digital should sort that out, because if sole traders each have seventeen grand down the back of the sofa as HMRC’s tax gap figures suggest, then presumably larger businesses have commensurate quantities of overlooked turnover.
We could well end up with a three line tax code and, instead of having the longest tax code in the world, wind up in the Guiness Book of Records for the shortest. HMRC guidance would similarly be reduced, particularly after the restoration of the death penalty for promoters and users of avoidance schemes. The current draft is a record-breaking four words long and is circulating for comment amongst stakeholder groups already, the main controversy being over whether or not to include the third word and the punctuation mark. If you have any comments on the draft guidance (reproduced in full here: “Pay your fucking taxes!”) please send them through the usual channels.