Keep it simple please urge accountants

CALLS to cut red tape seem to have fallen on deaf ears as accountants prepare themselves for the publication of this year’s Finance Act.

The act weighs in at an impressive 451 pages, although is still some way off 2004’s record breaking Finance Act, which boasted some 634 pages.

Even so, this year’s act is heavier than its predecessor – a relatively slimline affair that packed a punch in a modest 309 pages.

According to the Institute of Chartered Accountants in England and Wales (ICAEW) the heavyweight publication is not only disappointing but poses serious implications for UK competitiveness.

Ian Young, technical manager at ICAEW’s tax faculty said:

“The size of the Finance Act is an indicator of the growing complexity of the tax system.

“While we believe statute is preferable to guidance when it comes to tax legislation, and that shorter tax legislation is not always better, we had hoped that the reduction in size of the 2007 Finance Act was the start of a trend towards a simpler tax system. Unfortunately the trend has not been maintained.”

Figures for the last 30 years compiled by the ICAEW show that modern day Finance Acts are much longer than those in earlier years.

However, although the number of pages in the second half of the noughties has fallen, the average number is still more than three times the average in the early part of the 1980s making it one of the longest tax codes in the world.

“This is unsatisfactory for the competitiveness of the UK and there is a pressing need for the UK to develop a simpler tax code,” warned Mr Young.

“We welcome the Chancellor’s commitment to simplifying the tax system but we are concerned that any changes will be at the margins. Real simplification will only come from radical and bold action. In the meantime, new changes should be kept to a minimum.”