We have previously commented on the establishment of the Office of Tax Simplification (OTS) as an independent office of the Treasury.

On 8 November 2010 the OTS released a list of all 1,042 tax reliefs currently in operation which it will review to determine which ones can be removed or adjusted in order to simplify the tax system. John Whiting, director of tax at the OTS, noted that he wanted to target those reliefs that can “simply no longer be used, or are too complex and burdensome to be properly effective.”

The criteria on which the OTS will base its recommendations include:

  • whether there is a high level of complexity, cost and administrative burden in claiming the reliefs;
  • if reliefs designed to influence behaviour do so effectively;
  • evidence of take-up and awareness of the reliefs;
  • whether the policy rationale for the reliefs is still valid.
  • the likely mpact of changing or repealing the relief or exemption.

It is likely that the initial targets will be niche or anachronistic reliefs rather than some of the ‘household names’.