The government is seeking views on the impact on individuals and businesses of removing 36 tax reliefs.
Budget 2011 announced the withdrawal of 43 reliefs. The Office of Tax Simplification had recommended that 47 reliefs should be abolished on the basis that there is no ongoing policy rationale, or the reliefs are ‘time expired’, or their value is outweighed by the administrative burden.
‘On the basis of these recommendations, as well as ongoing work by HM Treasury and HMRC, the government identified seven reliefs that had expired and could be abolished immediately and a further 36 that could be abolished after a period of transition,’ the Treasury said in its Consultation on the abolition of 36 tax reliefs, published today.
The current Finance Bill includes (at clause 91 and Sch 26) the abolition of seven ‘redundant reliefs’ relating to income tax, corporation tax and stamp duties.
Not all of the OTS’s recommendations have been accepted. For example, the Treasury has judged that the relief allowing literary and creative artists’ profits of two consecutive tax years to be averaged is ‘necessary to maintain stability and certainty for this taxpayer group at this uncertain time’.
The OTS had said: ‘Whilst the policy rationale may remain valid in some cases, in many [the relief] has been replaced with spreading performed by the artist’s agent. Unlike farmers averaging we do not think that there is sufficient justification as to why this sector should receive favourable tax treatment, as the fluctuation of profits is not outside the control of the artist.
‘Whilst there are no compelling simplification reasons to abolish this relief, in that it is known and understood by the relevant sector, we cannot really see that it is fully justified.’
The reliefs now earmarked for abolition include some capital allowances, life assurance premium relief and the 15 pence per day luncheon vouchers exemption.
The Treasury is encouraging ‘all interested parties’ to engage fully with the consultation, to ensure that the government’s approach to simplification through the removal of tax reliefs is carried out ‘without unintended effects on taxpayers’.
The government is seeking views on the impact on individuals and businesses of removing 36 tax reliefs.
Budget 2011 announced the withdrawal of 43 reliefs. The Office of Tax Simplification had recommended that 47 reliefs should be abolished on the basis that there is no ongoing policy rationale, or the reliefs are ‘time expired’, or their value is outweighed by the administrative burden.
‘On the basis of these recommendations, as well as ongoing work by HM Treasury and HMRC, the government identified seven reliefs that had expired and could be abolished immediately and a further 36 that could be abolished after a period of transition,’ the Treasury said in its Consultation on the abolition of 36 tax reliefs, published today.
The current Finance Bill includes (at clause 91 and Sch 26) the abolition of seven ‘redundant reliefs’ relating to income tax, corporation tax and stamp duties.
Not all of the OTS’s recommendations have been accepted. For example, the Treasury has judged that the relief allowing literary and creative artists’ profits of two consecutive tax years to be averaged is ‘necessary to maintain stability and certainty for this taxpayer group at this uncertain time’.
The OTS had said: ‘Whilst the policy rationale may remain valid in some cases, in many [the relief] has been replaced with spreading performed by the artist’s agent. Unlike farmers averaging we do not think that there is sufficient justification as to why this sector should receive favourable tax treatment, as the fluctuation of profits is not outside the control of the artist.
‘Whilst there are no compelling simplification reasons to abolish this relief, in that it is known and understood by the relevant sector, we cannot really see that it is fully justified.’
The reliefs now earmarked for abolition include some capital allowances, life assurance premium relief and the 15 pence per day luncheon vouchers exemption.
The Treasury is encouraging ‘all interested parties’ to engage fully with the consultation, to ensure that the government’s approach to simplification through the removal of tax reliefs is carried out ‘without unintended effects on taxpayers’.
