Third Bill Published Under UK Tax Simplification Project

by Jason Gorringe, Tax-News.com, London

09 March 2004

The UK government's Tax Law Rewrite project, which aims to rewrite primary direct tax legislation so that it is clearer and easier to understand, without changing its general effect, last week published its third draft bill.

The project was established in 1996 on the basis of full consultation. The project's first two Bills, the Capital Allowances Act, which was enacted in 2001 and the Income Tax (Earnings and Pensions) Act which was enacted in 2003 have, according to the Inland Revenue, been well received by the tax community, and are viewed as a great improvement on the previous legislation in terms of clarity and accessibility.

The key points of the project are: clearer, more logical structure for tax legislation; use of plain language and other reader aids; no alteration of main tax policies; (possibly) some minor policy changes, where these further improve the current legislation; full consultation with interested parties throughout the life of the project; and new streamlined Parliamentary procedures for enacting 'rewrite Bills'.

In a written answer to a Parliamentary Question the Paymaster General, Dawn Primarolo announced last Thursday that: "I am pleased to tell the House that the Tax Law Rewrite project will today reach another major milestone. The Inland Revenue will publish the project's third draft Bill, on trading, property, savings and investment and miscellaneous income, for a final round of consultation.

"The Bill will also cover the special rules for charging foreign income and partnerships and the relief rules for rent-a-room and foster carers. The Bill will be ready for introduction in Parliament by the end of the year."

She concluded: "Earlier versions of this rewritten legislation have been extensively revised in the light of comments and suggestions from tax professionals and other interested parties. This continuous dialogue between the project team and business interests, tax practitioners, the legal profession and Inland Revenue specialists is a key feature contributing to the success of the project."

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