Institute welcomes proposed cuts to red tape for business

The Chartered Institute of Taxation (CIOT) has given an enthusiastic welcome to the Chancellor’s announcement that the Government will be implementing recommendations from the Office of Tax Simplification (OTS) that would significantly cut administrative burdens for employers. In particular these include proposals to make it much easier for them to process employee benefits and expenses.

Colin Ben-Nathan, Chairman of the CIOT’s Employment Taxes Sub-Committee, commented:

“It is good to see the Government listening to the OTS and taking action on simplifying the tax system for business.

“Employers are subject to a cumbersome system for the reporting of employee benefits and expenses and its streamlining should be a high priority. In particular, introducing a Reimbursed Expenses Exemption to replace the dispensation process is well worth considering as it could cut through the whole process of having to report non-taxable expenses.

“Putting in place a system of voluntary payrolling of benefits is long overdue. It will cut down on end of year administration. Many payroll departments will be able to process the benefit through the payroll as part of their normal process through the year.”

The Chancellor also announced that he would be adopting the OTS proposals for the collection of Class 2 NICs to be moved into the Self Assessment system and collected in the same way as income tax and Class 4 NICs.

Colin Ben-Nathan added:

“This is a welcome and overdue simplification. It builds on OTS proposals from 2011 and 2012 and will be helpful in reducing administrative burdens for the self-employed, especially if Small Earnings Exemption claims, deferrals and under/over payments of NICs are all included in the self-assessment process.

“However, those on lower incomes may need greater assistance from HMRC if they are to avoid getting behind with paying their taxes. Education will be needed around budgeting for taxes that are payable potentially 22 months after some of the income was earned (possibly longer depending on accounting year end). HMRC should consider providing a “pay monthly on account” option for those affected to cover Class 2, Class 4 and income tax.

“This could be a first step towards combining Classes 2 and 4 NICs.”



Notes to editors:


1.       The Chartered Institute of Taxation

The Chartered Institute of Taxation (CIOT) is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries.  The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.

The CIOT’s 17,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.