OTS recommends overarching principle of tax simplification

The Office of Tax Simplification (OTS) has published a report which sets out its approach to tax simplification and makes one general recommendation: ‘that the principle of simplification should be embedded in the general tax policy making process’.

The report follows the Treasury’s statutory five-year review of the OTS which was published on 30 November 2021 (‘tax administration and maintenance day’).

The report sets out an analysis of tax complexity and its impact; recommends principles for officials to use in tax policy development; and refreshes the OTS’s future aims and priorities, and measures of success.

The report considers complexity, not only in terms of subject matter and policy (for example, unintended effects of tax rules), but also in how tax policy is set out in legislation and the importance of clear guidance to help tax advisers and HMRC understand and apply that legislation.

The report outlines four key questions for the UK government to consider in the future development of tax policy:

• Are the tax rules, their purpose and their consequences easy to understand and predict?
• Do the tax rules take advantage of technology?
• Is compliance with the rules straightforward?
• Could taxpayers be better supported?