Too complicated – that is the warning from specialists E3 Consulting about the UK’s tax system.
As the country’s six million businesses chart their recovery from the Covid pandemic, property tax specialists E3 has urged the government to cut the red rape.
The plea comes as HM Treasury announces its first review of the Office for Tax Simplification, which was launched by then Chancellor George Osborne in 2010 to untangle the spaghetti bowl of tax law.
Managing director Alun Oliver FRICS said that tax has instead become more opaque, with the new ‘super deduction’ – unveiled as one of Chancellor Rishi Sunak’s flagship policies in the Budget – branded as ‘super complicated’.
E3, with offices in London, Southampton and Bournemouth, called for greater simplification to support investment and reduce the burden on businesses.
Alun, who co-founded E3 with wife Nicky in 2003, said: “The government has talked for years about simplification.
“Then, at every single turn, it adds more complications and simply creates more confusion. The super deduction is a good example of something which is super complicated.
“There are many different elements and it is not universally applicable. Although tax reliefs are welcome, making them unnecessarily complex and burdensome only means they fail to encourage new investment and the growth desired.
“It also places a greater and disproportionate burden on business, especially SMEs, who need to get it right first time in compliance for HMRC purposes where risk management is key.”
He added: “Rules are always being tweaked, extended or quietly reverted back to their original form so it’s no wonder that there is confusion.
“One simple step would be to increase the timespan of temporary allowances. For example, with the super deduction this could be set for five years instead of two.”
The Office for Tax Simplification was introduced to streamline the UK’s codes and reliefs.
HM Treasury’s first five-year review of the effectiveness of the office was announced on March 23, 2021 and should be published later in the Autumn.
It will take comments from individuals, businesses, tax professionals and academia as well as an independent advisory panel. E3 will in due course will be submitting its feedback on this and several other consultations.
The super-deduction announced in the Chancellor’s Budget allows companies to reduce their tax bill when they invest in their business by 130 per cent of the cost, but has come under fire for excluding certain groupings, including income tax-payers and property investors.
E3 Consulting is headquartered at Ocean Village in Southampton with offices in London and Bournemouth.
It provides specialist property tax advice to owners, investors and occupiers of UK real estate. The business advises on Capital Allowances, Land Remediation Relief, VAT, Repairs and Maintenance and Community Infrastructure Levy (CIL).
Contact James Tourgout on 07827 806400 and firstname.lastname@example.org for more details.