Recommendations to simplify UK’s “spaghetti bowl” of tax reliefs put to Chancellor

The final recommendations on a selection of the UK’s tax reliefs have been put to the Chancellor and published today by the Office of Tax Simplification (OTS).

Following extensive review and consultation on 155 tax reliefs including ones relating to Income Tax, Capital Gains Tax and Inheritance Tax, recommendations have been made as to whether a relief should either be retained in its current state, simplified to ease administrative burdens, or be abolished altogether, with the aim of simplifying the often complex tax reliefs system with common sense proposals.

The final report builds on the direction set out in our December interim report, measuring the reliefs against consistent criteria, and evaluating their effectiveness and relevance.

John Whiting, Tax Director for the Office of Tax Simplification said:

“It’s clear that many of the reliefs are valuable and clear in their purpose and operation, so we have not sought to change them, but others need simplifying or extending to be properly effective. Some have simply expired and have no further use; a number are poorly targeted leading to negligible value, or their benefit is outweighed by the administrative burden in using them.

“We’ve had to make some hard choices to give us a manageable list to review at this stage, but we hope that the recommendations we have put forward today represent a common sense approach, and would help to ease the burdens of the more useful tax reliefs on those that use them.

“Since this review started I have been delighted by the interest and support for our task, and I would like to thank all those that contributed to the review along the way.”

Click here for the full report on the OTS recommendations.

The OTS will now continue to focus on its second ongoing review, review of taxation for small business, with an interim report due shortly.