The Chancellor, Kwasi Kwarteng announced on Friday as part of the Government’s mini-budget that the Office of Tax Simplification (the OTS) will be shut down.

The Chancellor said “for the tax system to favour growth Mr Speaker, it needs to be much simpler. I am hugely grateful to the OTS for everything they have achieved since 2010 but instead of a single arm’s length body which is separate from the Treasury and HMRC we need to embed tax simplification into the heart of Government. That is why Mr Speaker I have decided to wind down the OTS…”

Instead, he plans to mandate every one of his tax officials to focus on simplifying the tax code. This is in a bid by the Government to make the tax system more dynamic and fairer to families.

The OTS was set up in 2010 to identify areas where complexities in the tax system for businesses and individual taxpayers can be reduced. The body is an independent office of HM Treasury.

Previously, the OTS urged the Government to overhaul capital gains tax and as a result the Government did accept some of the technical and administrative recommendations made by the OTS. The OTS has also previously outlined recommendations for simplifying the technical design of IHT, but the Government decided not to proceed with those changes.

This announcement was a surprise to most as only in November 2021 did HM Treasury publish its first five-yearly review of the OTS concluding that the need for the OTS remained undiminished.

It will be interesting to see if tax officials have the time and resources to focus on simplifying the tax code on top of their day jobs and whether we will see any simplification brought to the capital gains tax and inheritance tax frameworks in the future.

"According to its most recent annual report, the OTS had an average full-time-equivalent headcount of fewer than 10 during the last financial year. Its budget for the year was £1,057,000, of which staff costs accounted for £868,000."