150% increase in tax legislation
Published: 07 September, 2009
LONDON: The UK now has the longest tax code in the world, creating numerous problems of interpretation, understanding, and locating legislation. This year alone the Corporation Tax Act adds a substantial quantity of pages to the code, and makes interpreting legislation more difficult than ever.
Over the last 12 years, the annual guide, Tolley's Yellow Tax Handbook, has more than doubled in size, highlighting the growing complexity of the UK tax system and the impact of the government's recent attempts to introduce recession busting legislation.
In 1997 the Handbook, which contains the UK's main tax laws, had 4998 pages in two volumes; the 2009 edition runs to 11 520 pages over four volumes.
LexisNexis tax expert Mike Truman says; "The complexity of the UK tax system has been increasing the burden of compliance on businesses and individuals alike for many years. Although initially Alastair Darling looked as if he might bring simplification to the system as Chancellor, it seems to have been a false dawn, and we have seen little evidence of the tide of legislation ebbing.
"While the end of the tax law rewrite programme will allow some transitional provisions to fall out of the code, there has been a tremendous increase in the pages of legislation devoted to revenue powers and anti-avoidance. There is a desperate need to curb the temptation of all Chancellors to meddle with the tax system, and to focus instead on removing unnecessary complexity. At the moment, despite the stated desire to simplify, there is no sign of this happening in practice; indeed, we are moving in the wrong direction."
Over the course of the past 12 years many changes to even new taxes being introduced have seen them replaced or dumped within as little as 5 years of their enactment.
Last year the starting rate of income tax introduced in 1999 was scrapped; numerous changes to corporation tax and capital allowances over the years has generated pages and pages of additional content; and various complex changes within the Finance Act 2009 will see greater disclosure and anti-avoidance burdens being placed on businesses.
Nicky Briggs, publishing operations director, LexisNexis says, "Each year we plan for an increase in the overall size of our Tolley's Yellow Tax Handbook, the ‘Bible' for tax experts. As tax legislation needs to be looked at cumulatively this is an important publication since it contains the tax code pertinent to the year of publication. However, with such great volumes of tax code being produced and the need to retain previous years' editions should tax and accountancy professionals need to refer to the legislation as it stood previously, the government is literally creating towers of tax books in practitioners offices."