ICAS Urges Simplification Of Tax Law For UK 2004 Budget

by Robert Lee, Tax-News.com, London

20 October 2003

The Institute of Chartered Accountants of Scotland has called on the UK government to simplify the process of making corporation tax instalment payments, arguing that estimating current year tax liabilities wastes resources which could be allocated more efficiently elsewhere.

In a letter to UK Chancellor of the Exchequer Gordon Brown, released on Wednesday, ICAS put forward a number of recommendations (based on suggestions from its members) to be included in the 2004 budget.

Amongst the recommendations is a proposal to scrap penalties for late filing of tax returns for firms that pay no tax, and the removal of anomalies from the capital gains tax relief rules on exchanges of securities, where indirect shareholdings are treated unfavourably.

Other suggestions from the Institute included:

• An easing of restrictions on the tax relief available on interest paid on loans to close companies;
• A new pooling of rural business activities to facilitate diversification of farming;
• More generous reliefs for expenses where a business has ceased;
• Technical changes to the IR35 regime.

“In our continuing campaign for simplification of tax, ICAS would like to see the Class 2 and 4 self-employed National Insurance contributions merged and collected as a single levy with income tax," Donald Drysdale, ICAS Assistant Director of Taxation announced, adding that:

“ICAS is concerned about the number of reliefs and allowances that are not revalorised annually with inflation and recommend that these are restored to their original levels."

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