It seems that, as with the regular cycle of the seasons, there is yet another government "headline catching initiative" to reduce the red tape negatively impacting British business.
The Telegraph reports that the Treasury has asked the Orifice of Tax Simplification (OTS) to identify how bureaucracy in the tax system holds small businesses back.
Exchequer Secretary David Gauke, who is beginning to feature on this site a little too frequently, claims that wants the OTS to identify ways to improve the way that HMRC interacts with small businesses, including the processes involved in starting and growing new firms.
One of the major problems with the tax system, as it currently stands, is that it was set up with a "Victorian mindset" of people working for only one employer. In the real world many people are now self employed, or work for several employers.
Job "flexibility" and "getting on our bikes" has long been pushed by governments of all political persuasions. However, it is ironic that the tax system (under the control of these governments) remains rigidly inflexible wrt "portfolio" working.
As to whether anything tangible comes of this latest "initiative", remains to be seen. I would observe:
1 Governments, over the last few decades, have all claimed that they want to reduce the burden on business. Yet that burden has steadily increased over the years. These "initiatives" for reducing red tape make nice headlines, yet nothing ever seems to come of them.
2 HMRC's mess is the direct result of government interference, and the ever increasing complexity of tax legislation. The solution lies in the hands of the politicians.
3 Politicians thrive on complexity and tinkering with the law/regulations.
Why?
They need to show the voters that they perform a useful function, and that we cannot do without them.
In order for things to change/improve those who control the system (ie the politicians) must genuinely want things to change/improve.
The question is, do the politicians really want things to change and improve?
All views and comments, as always, welcome.
Tax does have to be taxing.
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To be fair, self-assessment can cope with multiple employments/self-employments/portfolio working etc. PAYE is a little more tied in to the "Victorian" mindset of one employer, but back in the day when Tax Officers were properly trained, they could juggle allowances around to make sure that people paid the right amount of tax. This was done with bits of paper without benefit of computers and it worked pretty well.
ReplyDeleteThere has always been "red tape" and I defy you to find a tax system without it. (Ever seen an American tax return? Horrendous!) Having said this, the unlamented Gordon Brown could not resist constantly tinkering with the system, making it inpenetrable to both the taxpayer and the Inspector. The problem we have now is a complicated tax regime run by people who have not the slightest clue how to operate it.
They don't want people who can understand how to operate it. They would have to get reasonably intelligent people in who expect a decent wage for the hard work they do.
ReplyDeleteWhat they want is a process that can be broken down like a production line where no individual has any responsibility for the mess that comes out the other end. Then they can drag someone in off the street, say put that figure in that box and press 'enter'. That way you can pay them peanuts and replace them every 6 months.