Tax Simplification is the answer to HMRC's problems

August 07, 2012 5:13 PM

HMRC plan to make taxpayers legally responsible for checking that the taxman is taking the correct amount of tax. The organisation is proposing to change current rules which waive underpayment of income tax if the root cause is delays and mistakes by HMRC officials.HMRC receive around 166,244 complaints each year in response to demands for underpaid tax. But it's hardly surprising considering the labyrinthine tax system that they have to administer. The UK’s most popular tax guide Tolley’s has ballooned to over 17,000 pages, up from 11,520 in 2011. HMRC's endless errors have shown that the tax system confounds even the most studious tax experts. As Robin Williamson of the Low Incomes Tax Reform Group said:


 If you deal with tax every day, as the Revenue does, and are expert on the subject, this is probably fine. But if you do other things for a living and come across tax only once a year, you probably won’t have much of a clue.

 HMRC shouldn't be trying to pass the buck to taxpayers because it's too complicated for them to manage. Instead politicians should address the root cause of the problem – the needlessly and ridiculously complicated tax system. Earlier this year our 2020 Tax Commission’s final report proposed radical tax reform which would make the system easier for HMRC to administer and for taxpayers to understand. A simplified tax system, with complexity swept aside will make it far easier for HMRC to do their job and ensure that all taxpayers pay no more or no less than their fair share.
HMRC plan to make taxpayers legally responsible for checking that the taxman is taking the correct amount of tax. The organisation is proposing to change current rules which waive underpayment of income tax if the root cause is delays and mistakes by HMRC officials.HMRC receive around 166,244 complaints each year in response to demands for underpaid tax. But it's hardly surprising considering the labyrinthine tax system that they have to administer. The UK’s most popular tax guide Tolley’s has ballooned to over 17,000 pages, up from 11,520 in 2011. HMRC's endless errors have shown that the tax system confounds even the most studious tax experts. As Robin Williamson of the Low Incomes Tax Reform Group said:


 If you deal with tax every day, as the Revenue does, and are expert on the subject, this is probably fine. But if you do other things for a living and come across tax only once a year, you probably won’t have much of a clue.

 HMRC shouldn't be trying to pass the buck to taxpayers because it's too complicated for them to manage. Instead politicians should address the root cause of the problem – the needlessly and ridiculously complicated tax system. Earlier this year our 2020 Tax Commission’s final report proposed radical tax reform which would make the system easier for HMRC to administer and for taxpayers to understand. A simplified tax system, with complexity swept aside will make it far easier for HMRC to do their job and ensure that all taxpayers pay no more or no less than their fair share.

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