British Chamber of Commerce Report Calls For Appointment Of 'Tax Czar'

Mandy Robinson, Tax-news.com, London

31 October 2000

Yesterday, the British Chambers of Commerce (BCC) unveiled its 2001 pre-Budget submission in which it urged Chancellor Gordon Brown to appoint a Treasury minister to take responsibility for simplifying the UK tax system. In its submission the BCC expressed fears over the unneccessary official tax and payroll burdens faced by small and medium-sized enterprises (SMEs) as they are forced to become the "Government's unpaid tax and benefit collectors."

Dr Ian Peters, BCC deputy director general, commented: 'Too much tinkering with the tax system by successive governments has distorted behaviour and increased compliance costs for business. Administrative burdens from tax and other regulations use up the most valuable resource of owners and managers - their time. The top priority for the Chancellor must be a simpler tax system that promotes productivity and growth.'

The current complex tax system and the snowballing impact of regulations, complains the report, is stifling business growth and it calls for an audit to be performed on an annual basis to monitor the effects of regulations on businesses, particularly in terms of growth. The Chancellor, says the BCC, should reduce employers' payroll costs either via compensation or by shifting more of the burden of tax collection to government.

Further amendments to reduce the SMEs compliance burden called for in the report include the set-up of a business-led taskforce to review systematically how to make the tax system simpler to comply with, a concise timetable for the amalgamation of PAYE and NI systems with interim objectives, and that businesses under a determined turnover threshold should be allowed the responsibility to name their own time scales for VAT payments. These steps would be supervised by the appointed tax minister or 'czar', says the BCC, who would then report to Parliament annually. Dr Peters added: 'The Chancellor must renew government's commitment to improving the competitive position of the UK by introducing a series of measures that will encourage entrepreneurship and investment by SMEs.'

Of course the BCC demands are no surprise to the government. Last month the BCC launched a "paperwork protest" in an attempt to extract a commitment from the government to simplify the tax system and reduce bureaucratic red tape. Through the campaign, "Making Tax Simple", the BCC used the results of a web-based questionnaire which invited firms to explain the frustration they experience when attempting to wade through the tax system, from paperwork and calculations to benefits in kind, investment incentives and complex payroll procedures.

The real surprise will be if the Treasury's antediluvian pen-pushers respond to calls for more simplicity. Complexity = more civil servants, in Whitehall's reality.

Gordon Brown is due to unveil his pre-Budget report on November 8.

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