Tax experts have said that tax relief reforms should be implemented in conjunction with a reform of the actual rates of taxation.
Lawyers from Berwin Leighton Paisner have welcomed the Office of Tax Simplification’s interim report but have called for a “bolder” approach to the tax relief review.
Recently, the OTS announced that out of the 13 tax reliefs it had examined, five could be abolished. A total of 1,042 tax reliefs have been identified for review.
Kevin Cummings, a tax expert at BLP, said the OTS’ methodology was sound but the challenge lies in applying a robust and rigorous approach to the remaining reliefs. The rest of the review must take a much bolder step towards eliminating the current confusion surrounding tax codes. Amending or abolishing tax reliefs will only be effective if they are accompanied by changes to rates, he added.
Meanwhile, umbrella company contractors and other freelancers met representatives of the OTS in Warrington earlier this month.
The Freelance and Contractors Services Association organised a workshop so that contractors could give feedback and express their concerns surrounding IR35 and other potential changes to the UK’s tax regime.
Contractors have long wished to see the demise of the cumbersome IR35 legislation but they are also concerned over how its replacement will affect them.
Brookson hosted the workshop and their MD, Martin Hesketh, said that the lack of clarity surrounding IR35 had caused major headaches for contractors. He explained that they have had to do things that don’t necessarily help or support their clients in order to protect their own self-employed status, such as not attending joint training sessions and taking their time responding to client requirements to ensure all the right documentation was in place.
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