Tax  

Government warned of dangers in digital tax

Chancellor Phillip Hammond said last January he was concerned the system was "particularly complex".

In an interim report out in November, the OTS recommended the government should move to a fully digital system for inheritance tax.

Rachael Griffin, tax and financial planning expert at Quilter, said: "Simplification seems to be a buzzword in government these days, between ISA simplification, IHT simplification and now tax simplification through technology.

"This is no bad thing as layer upon layer of tax changes over the past number of years has built a cake that is verging on toppling over. However, the crucial element here is that all the simplification initiatives join up and do not add yet another complex layer.

"As the OTS acknowledges, technology is a double-edged sword as it presents opportunities to make life easier but also comes with risks. It is therefore encouraging they are continuing to review the impact, particularly on vulnerable customers."

rachel.addison@ft.com