Government opens consultation on tax policies

The coalition government said they would be more open and transparent when it came to policy making and it appears that they are sticking to their word.

On Tuesday, David Gauke, the Exchequer Secretary to the Treasury published nine documents relating to tax matters. They are intended to provide tax professionals and businesses with a comprehensive view of proposed tax reforms and give interested parties the opportunity to comment on the proposals.

The consultations that have been opened include PAYE reform, pensions tax relief, regulations regarding the national minimum wage and furnished holiday lettings.

Mr Gauke said that the government wants the tax system to work better and more simply for the taxpayer. By reducing the taxation burden, making the correct choices and involving taxpayers in the decision making process, we are sending out a clear message that Britain is open for business, he added.

The Office of Tax Simplification was formally launched last week by Mr. Gauke and George Osborne. One of the first tasks it needs to perform is to examine the tax regime for small businesses.

Tax experts generally welcomed the plans contained in the consultation documents. The President of the CIOT, Vincent Oratore, said the consultations were further evidence that the government is willing to listen and work with the tax profession to find a more efficient taxation system.

Joanne Segars from the National Association of Pensions Funds said the proposals for pension tax relief should encourage higher salaried employees to remain in their company schemes although it would speed up the move away from final salary pension schemes. The new proposals would reduce the annual allowance for tax-advantaged pensions saving to around £40,000 from the current £255,000.

The Institute of Directors however has stated that it is very concerned about the proposed change to the travel and subsistence scheme that is currently being used by around 90,000 National Minimum Wage earners.

Further information about each of the proposals can be found on the HM Treasury website.