Board minutes - 23 February 2011

Present

Rt Hon Michael Jack – Chairman
John Whiting – Tax Director
Dave Hartnett – HM Revenue and Customs
Edward Troup – HM Treasury
Adam Broke

Secretary

Caroline Turnbull-Hall

In attendance

Tunde Ojetola
Anish Mehta

Apologies

Teresa Graham
Jeremy Sherwood

1. Minutes of the last meeting

The minutes of the 20 January 2010 meeting were formally agreed.

There were no matters arising.

2. Update on reports to be published in March

The reliefs report is to be signed off on 28 February and will then go to print. The Exchequer Secretary to the Treasury will make a statement in the House of Commons on 3 March 2011 announcing the publication of the report, in line with the commitment he made to the House last July. The report will then be published on the website and printed on 3 March. 120 copies will be printed (70 for the House of Commons, 30 for the Lords and 20 for the Treasury Committee). The small business report will follow a similar timetable a week later. It was decided to send a copy of both reports to MPs who had expressed an interest in the work of the Office.

3. Reliefs report

The remit of the OTS in relation to reliefs was discussed. The concern of the Board is that the OTS achieves the maximum traction with ministers by making challenging suggestions, remembering that simplification is in itself complex.

It is important that the OTS maintains its distinctive offering and does not stray into the territory of other commentators; to this end recommendations should be focussed on simplification only and should not make recommendations in other areas e.g. in relation to policy. However the point was made that stakeholders have made suggestions as to how reliefs could be changed to make them easier to use etc and there was an expectation that these suggestions would be taken into account and seen to be taken into account. Additionally some of the suggestions will help the determination of the next steps. It was agreed that the report would indicate what the simplification recommendations are but that the suggestions would also be mentioned as having been raised by stakeholders.

A balance has to be struck between a desire that the OTS is bold in relation to its recommendations, and that by being bold it will be apparent that there are some large simplifications that could be made. Whilst this is the core mission of the OTS, there is less scope for reform in reality, as there are other economic and political factors the Government needs to take into account when formulating tax policy.

4. Small Business Review

The Board discussed the emerging shape of the interim report which was reaching its final stages of preparation. It would be important to reflect the diversity of views put across to the OTS by the Consultative Committee and arising from the meetings held around the country in 2010. The OTS should focus on highlighting areas of complexity and making recommendations based on options likely to lead to greater simplification. It should set out a direction of travel, with some specific areas to focus on, and identify further analysis that might be needed before the final report is delivered.

The intention is to circulate the next draft of the report to the Consultative Committee on 24 February 2011.

5. Response to Budget

It is important that the OTS is able to respond to any Budget day announcements on simplification. A more detailed response will be considered after the Budget.

6. Evaluation of the OTS

Next projects: There was a discussion on next projects, and suggestions have been made in a letter to the Minister. Suggestions include a possible review of pensioner taxation, a review of share schemes, a review looking at aligning terms and definitions across tax legislation and a review of monetary thresholds and de minimis limits to test whether they were working as intended.
The proposal to review and streamline definitions in tax legislation was discussed, which could be useful but would need a draft indicative project scope. It was also suggested that this may be a project that leads itself more to an academic overview (with OTS oversight). There are good examples from other jurisdictions, e.g. the US has one definition of child for the whole of the tax code.
Resourcing: The method of working with a public/private sector team was considered and this was felt to have worked well; going forward the same resource (or ideally more) will be required, depending on future projects.

7. Any other business

Appointment of permanent Board: HMT is to advertise post Budget and prepare a role profile. The anticipated time between the advertisement and appointment is anticipated to be 3 months, with senior HMT staff interviewing.

TLRC/OTS conference: A joint conference between the OTS and the Tax Law Review Committee of the Institute for Fiscal Studies has been scheduled for the morning of 6 April 2011.

8. Dates of future meetings

These will be recirculated in due course, with more consultation about suitable dates.