Tax Loopholes

The House of Commons Public Accounts Committee (PAC) has criticised Britain's 1,128 tax reliefs.

For why?

In PAC's view they are a £100BN recipe for abuse, avoidance and evasion.

PAC notes that government departments are struggling to cope with the growing demands of managing the ballooning number of them.

One relief, highlighted by Margaret Hodge, is late-night taxi relief which exempts employees who are supplied with them from facing income tax charges for "benefits in kind".

Ms Hodge said that rather than helping shift workers it had ended up benefiting the often expansively paid employees of big law and accountancy firms. This, she said (according to The Independent), made it "hard to justify".

Ms Hodge said:

"Much more radical simplification of the tax system is required if we are to get to grips with aggressive tax avoidance.

If the Government chooses to spend £100bn on tax reliefs, at a time of austerity, this expenditure should be considered in the same way as spending programmes. Many tax reliefs are introduced without clear objectives and are not evaluated as fully."

I agree that the tax system needs to be simplified, I am sure that taxpayers (both staff of HMRC and those not employed by HMRC) would agree on that point.

However, the legislation is passed by our "respected" MPs who are now criticising the system that they created.

Maybe PAC and others who criticise the system would care to remember that it is they who created it in the first place!

Tax does have to be taxing.

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