CIOT Calls For Simplification Of Business Tax Code

by Jason Gorringe, Tax-News.com, London

10 June 2002

In the fourth of its 'Quick Win' series, detailing easily implemented tax changes which would simplify the UK's tax code whilst remaining revenue neutral, and creating few 'winners' or 'losers', the Chartered Institute of Taxation (CIOT) has called for a reduction in the administrative burden on employers.

In a statement released last week, the CIOT's former President (replaced in late May by practising barrister, Penny Hamilton), John Whiting, explained that:

'Simplification of our current PAYE and NIC (National Insurance Contributions) system would radically help companies with rapidly rising administrative costs of payrolls. If Government wants to help business grow, trimming this area of red tape would be a great place to start.'

The 'Quick Wins' paper suggests several short term measures which would simplify this area of taxation for employers in the United Kingdom. These include:

- Streamlining of the pension scheme approval process

- Tax exemptions on support for employees with special needs

- The exemption of income tax and NIC for employees' overseas medical expenses

- An increase in the limit from £8,000 to at least £20,000 before tax is paid when an employee is relocated

- Tax exemption for reasonable meals provided by companies (for example canteen meals for shift workers)

However, the CIOT paper also suggests long-term measures for simplification of the tax system for employers. Key among these was the proposal that PAYE and NIC should be integrated, as the tax body believes that if there is the political will to support this, it can be achieved.

'There is a need to review, update, or better integrate old limits and legislation,' the former CIOT President and PricewaterhouseCoopers partner concluded. 'Currently, all we are seeing is layer upon layer of ill-fitting legislation that is causing confusion and imposing additional administrative costs on companies.'

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