In a bid to simplify the UKs tax system, which has been branded one of the most complicated tax systems in the world, the government yesterday launched a new body called the Office of Tax Simplification (OTS).
The OTS is made up of independent experts and its task is to make recommendations to the Coalition Government on how best to simplify the tax system.
One the first tasks will be to review small business taxation, including the controversial IR35 legislation which could be positive news for contractors. According to the CIOT, the review is long overdue and will finally “even the playing field” for the UK’s small businesses.
The Office will provide an initial report to the Chancellor by in time for the 2011 Budget. It will point out areas of the tax system that cause the most day-to-day complexity and uncertainty for small businesses and recommend priority areas for simplification.
The Freelancer & Contractor Services Association (FCSA) has given the OTS launch a “cautious welcome”. Commenting on Contract Eye, they said;
“At the moment freelancers and contractors receive a number of tax reliefs (for instance on travel expenses and subsistence) to reflect the risks of the flexible workforce. Any moves by the Government to undermine the flexible workforce market, which UK plc is relying on more and more in these difficult times, will backfire on the UK economy.”
It is too early to tell how this new body will affect contractors but within the marketplace there is optimism that the Office of Tax Simplification will be good for them.
