Inland Revenue Publishes Plans For 2003/4 Income Tax Rewrite

by Jason Gorringe, Tax-News.com, London

25 April 2003

The Inland Revenue has published its plans for the Tax Law Rewrite Project for 2003/2004 which will seek to rewrite the regulations concerning PAYE (pay as you earn) so that it can be put before parliament after the summer recess.

The tax rewrite project came into being after a 1995 Inland Revenue report on UK tax law. It has been an ongoing process which aims to simplify the United Kingdom tax code by rewording certain parts of the primary legislation in clearer, more comprehensible language. However, the rewrite process does not seek to change the law itself, merely make it more understandable.

The second rewrite bill was put before parliament earlier this year, and this eventually transformed into the Income Tax (Pensions and Earnings) Act 2003 which came into effect this April.

The Paymaster General, Dawn Primarolo, hopes to make rapid progress towards the completion of the third rewrite bill so that the finalised regulations can be put before Parliament prior to April 6, 2004.

In summary, the task which the Tax Rewrite Project Team has set itself for 2003/2004 is:

• adjust clauses to take account of responses to Exposure Draft 13;
• complete work on the integration of foreign income;
• ensure that the clauses cover all persons liable to income tax;
• finalise the boundary between Bill 3 and Bill 4 material and make any necessary alterations to content;
• finalise the structure and construct boundaries;
• consider and prepare repeals, consequential amendments and transitionals schedules;
• and review the drafting style and consistency of approach.

The Project is hoping to complete a rewrite bill every two years, and has earmarked the income tax code as its next rewrite project, which will be put before Parliament in 2006. This will seek to address:

• core provisions such as rates of tax
• personal allowances and various specific exemptions
• losses
• anti-avoidance provisions
• special types of person
• and various regulatory arrangements.

Beyond his, the Project intends to tackle the corporate tax charging and calculation rules, though it is hoped a current review of corporation tax in tandem with the Inland Revenue should limit the amount of rewording that will need to take place.

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