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Wednesday, November 04, 2009

Tax Matters - Michael Izza

Michael Izza is interviewed by AccountingWEB:

"Q: In the ICAEW's Enterprise survey, 54% of respondents said UK regulatory and tax environment was 'not very' or 'not at all' business friendly. Employment tax and legislation and business tax changes were all regarded a hindrance. Why do you think businesses responded so negatively and what do you think can be done to improve the situation?

A: This is a constant refrain, and we hear this from businesses of all sizes. We have a great opportunity this year because we're moving into the last few months of this government, there has to be an election no later than June 2010 and this is now the time when business people of all sizes can start to talk to their MPs (or prospective MPs) about the things that bother them and the legislative changes they would like to see.

The institute has issued a manifesto and that was something we were talking to politicians about at the three main party conferences in September and October. One of the themes in it is that we need a more simplified government in this country. An area which I'm sure many of your members will be familiar with is the tax code. The tax code in this country now runs to over 11,200 pages.

There is nobody in HMRC who understands that from A-Z. There is no chartered accountant in this country who understands it from A – Z, it's just become too complicated. We have an opportunity to make something like that more simple, for everyone in business. This is the sort of thing we should be talking to the politicians about now and saying we want to see it changed.

We're at one of those moments in history where because of the economic crisis that we've just experienced and the fact that things are going to be very different going forward, we might be able to make a very significant change in something like that; and that's the sort of thing the institute is going to be asking for"
.

I fully agree wrt simplification. However, this is something that the ICAEW should have been calling for way back, not "going to be asking for"!

2 comments:

  1. Ken
    ICAEW has been calling for simplification for over ten years - witness the Tax Faculty's ten tenets for a simpler tax system - originally published in 1997 I think.

    ICAEW draws attention to these in every submission they make and every response to consultation document. This has also been the subject of Parliamentary debate:
    http://hansard.millbanksystems.com/lords/2000/nov/20/tax-complexity

    More recently the ICAEW hosted and supported the launch last year of an initiative by Lord Howe and George Osborne to establish an Office of Tax Simplification.

    Shortly after the launch of the Ten Tenets I recall a debate at ICAEW where Oliver Letwin was one of the speakers. I have long remembered his view that the ICAEW tax simplification campaign, whilst worthy would achieve nothing until voters started to pester their MPs about the complexities of our tax system. Experience has shown his advice to be correct.

    The ICAEW, in my experience (and I have no mandate to speak for them) has had to accept that public posturings on tax simplification achieve nothing of any substance and distract resources that can ber better targeted where they can have a meaningful impact.

    The transcript and indeed Michael's response may have omitted to make clear that the ICAEW will CONTINUE to ask for simplification of the tax system. That's all.

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  2. Mark, thanks for your note.

    Re "The ICAEW, in my experience (and I have no mandate to speak for them) has had to accept that public posturings on tax simplification achieve nothing of any substance and distract resources that can ber better targeted where they can have a meaningful impact."

    If the politicians are not pushed on a continual basis to simplify our grossly over complex tax system, nothing will ever happen. They need to be "hounded" on this issue until they address it.

    That is the only way to get them to act.

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