Will the Draft Finance Bill prove effective in simplifying the personal tax system? Lords Committee to investigate
The House of Lords Economic Affairs Committee has set up a Sub-Committee to inquire into the draft Finance Bill 2016 and specifically the extent to which the Bill will help simplify the personal tax system and how it will impact on the compliance burdens of individual tax payers.
The Committee are inviting written evidence on the draft Finance Bill to be received by 29 January. Areas they are particularly interested to hear evidence on are:
- Proposed changes to the taxation of savings and dividends – the Bill proposes to end the Tax Deduction System for Interest under which banks and building societies deduct tax from the interest they pay on deposits. A new Personal Savings Allowance will also be introduced. The draft clauses also substantially reform the taxation of dividends. .
- Simple Assessments – This introduces a new power allowing HMRC to access an individual's tax liability without a tax return being submitted. This is part of the Government's strategy to introduce digital tax accounts to eventually replace the annual tax return. The Committee is interested in views on the administration of Simple Assessments.
- Office of Tax Simplification (OTS) – The draft Bill will give the OTS statutory permanence and define its functions. The Committee would welcome views on whether this is likely to effectively contribute to the development of a simplified tax system.
The Finance Bill Sub-Committee's role is to focus on technical issues of tax administration, clarification and simplification rather than on rates or incidence of tax.
The Committee will report before the budget on the 16 March and the subsequent debates on the Finance Bill.