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Insight paper

The Office of Tax Simplification: What do 12 years of the OTS tell us about the role for an independent body in tax policy making?

This short guest paper examines the work of the Office of Tax Simplification over the 12 years of its life.

Edward Troup
Close up of coins and a HMRC tax form

The government should address important gaps in tax legislation scrutiny caused by Kwasi Kwarteng’s abolition of the Office of Tax Simplification (OTS).

This guest paper, written by former HMRC permanent secretary Edward Troup, says expectations were set too high when George Osborne created the OTS in 2010. 

Hamstrung from the outset by a lack of clarity around the term ‘simplification’ and from Osborne’s refusal – like previous chancellors – to weaken or remove power from ministers to make tax law, the OTS was excluded from the budget and finance bill process and had no ability to stem the flow of new tax complexity.

This “inevitable clash with the politics of taxation” meant the OTS “was doomed to failure”, but it was successful in improving tax administration and highlighted weakness in the scrutiny of tax legislation. Troup, therefore, argues that Kwarteng’s abolition of the OTS means an independent body is needed to help fill these gaps.

This new body should be established with lower – but more realistic – expectations of improving tax administration. There is also a need for more post-legislative scrutiny of tax legislation, including evaluation of the wider costs and burdens of tax policy. These changes, argues Troup, would make for a better functioning tax system, from which taxpayers, HMRC – and future chancellors – would all benefit.

 

 

Department
HM Treasury
Publisher
Institute for Government

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