It is expected that dozens of the 1042 tax reliefs, which include nearly 90 different inheritance tax relief options and over 40 types of capital gains tax relief, will be scrapped by Chancellor George Osborne. It is not currently known which reliefs will be repealed.
John Whiting, tax director for the OTS and former long-standing tax partner at PricewaterhouseCoopers, is leading the review and said many people are likely to be surprised by the “sheer number of reliefs in today’s tax system”.
“Many have a clear and highly valued benefit so clearly we would not seek to change those,” he said. “Others, however, may simply no longer be used, or are too complex and burdensome to be properly effective, so it is these that I want my team to focus on.”
As well as publishing a full list (available here) of the tax relief options, the OTS has set out the review criteria and methodology it will use to evaluate the effectiveness and relevance of the reliefs, before it reports back later this month.
The OTS said its provisional criteria will look at the complexity, cost and administrative burden in claiming the reliefs, evidence of economic efficiency, evidence of take-up or awareness, whether the policy rationale for the relief is still valid and the likely impact of changing or repealing the relief or exemption.
It did however, explain it was not necessarily simply looking for reliefs to be removed, but rather for opportunities for them to be streamlined, modified or delivered in a different way to make the tax system simpler.
Furthermore, to advise the OTS on its review, it is to establish a consultative committee of tax and business experts with which it will discuss its suggested criteria and ascertain whether there are any specific areas for consideration.
The OTS has also called on those who currently utilise the relief options to submit their views. Those who wish to do so can email ots-reliefs@ots.gsi.gov.uk
