Lords Select Committee Condemns Complexity Of UK Tax Law

by Robin Pilgrim, LawAndTax-News.com, London

29 June 2004

The all-party Economic Affairs Select Committee in the House of Lords has condemned the complexity of the UK's tax laws.

Suggesting that the government needs to strike a balance between closing loopholes to reduce the risk of tax evasion, and reducing the compliance burden for ordinary taxpayers, Committee chairman, Lord Preston explained last week that:

"We are one hundred percent behind the government in its aim of curbing tax avoidance. But we are not convinced that the legislation as it stands has been sufficiently thought through or exposed for serious consultation with those who will have to deal with its consequences."

The Lords Committee went on to suggest that further consultation should have been undertaken on several measures introduced in the Finance Bill, including the obligation to make prior disclosure of tax planning arrangements to the Inland Revenue, and the plans to force small businesses to pay corporate taxes on distributed income.

"We have seen the good results which such consultation has produced in the case of the government's measures to simplify the taxation of pensions. We would like to have seen something along the same lines for some at least of the revenue protection measures," Lord Preston concluded.

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