Andrew Tyrie MP, chairman of the Treasury select committee, has proposed a variety of ways for the government to strengthen the Office of Tax Simplification, one of which is that the OTS must be “more independent” and should not be a “creature” of the tax man.
The Conservative party manifesto included a pledge to establish the Office of Tax Simplification on a permanent basis and to expand the organisation’s role and capacity.
In a letter to chancellor George Osborne, published today (30 June), Mr Tyrie urged for certainty and coherence in the tax system and stated the Office of Tax Simplification should remain independent and not become a cohort of HM Revenue and Customs or HM Treasury.
He wrote: “It needs to be independent and have a reporting line to Parliament. It needs to have control of its own budget. This is a long way from its current position.”
Mr Tyrie also said the Office of Tax Simplification should not be allowed to become just a think-tank or academic research centre.
He cited the Office for Budget Responsibility as an example, stating that it has a statutory base, a clear line of accountability to Parliament, a mechanism to entrench the independence of its leader, and a small board, of which the first three of these are “essential requirements”.
Mr Tyrie said there is “merit” for the Office of Tax Simplification to produce an annual review of the tax system, which should assess whether the tax system is getting simpler or more complex.
Mr Tyrie added the Office of Tax Simplification should have a responsibility to respond to reasonable requests from HM Treasury or Parliament.
He added that while he was not an “enthusiast” for the creation of the OTS as HMRC’s central policy unit should have taken this over, “the die is cast”.
“If we are to have the OTS it needs to be given a fighting chance of doing a good job.”
Mr Tyrie concluded: “When it comes to tax - and not only tax - politicians tend to complicate matters.
“HMRC has come under considerable political pressure, from both government and Parliament, over the past 10 to 15 years, pressure that it has understandably not always been able to resist but which has arguably reduced its leadership’s effectiveness in tackling the simplification agenda.
“So simplification needs a stronger ally.”
emma.hughes@ft.com
Additional reporting by Donia O’Loughlin
