Board minutes - 29 June 2011

Present

Rt Hon Michael Jack – Chairman

John Whiting – Tax Director

Dave Hartnett – HM Revenue and Customs

Edward Troup – HM Treasury

Adam Broke

Teresa Graham

Secretary

Jeremy Sherwood

1. Minutes of the last meeting

The minutes of the 12 May 2011 meeting were formally agreed.

2. Action points from minutes

The OTS had arranged to visit HMRC’s operational teams in Euston dealing with the tax affairs of small businesses. The Board agreed with Dave Hartnett’s suggestion that the OTS should also meet a similar team outside London, or ensure HMRC colleagues from such locations are invited to the Euston meeting.
The OTS secretariat had drawn up overview plans for the proposed new projects and sent these to Board members alongside an updated plan for the next stage of the small business review.
Michael Jack had written to the Exchequer Secretary, David Gauke MP, setting out the OTS proposals for its 2011/12 work programme. The letter had been published on the OTS website.

3. New reviews – pensioner taxation and share schemes

Michael Jack reported back from a meeting with David Gauke MP that he and John Whiting had attended on 22 June. The meeting had been very positive and the Minister had given a favourable response to the OTS proposals for future work. There had been a useful discussion over the potential difficulties in the areas the OTS had selected for review.

For the proposed reviews into pensioner taxation and share schemes, the OTS would be looking at both legislative and administrative simplifications, and would aim to make practical proposals based on the evidence collected. Michael Jack advised that in both areas it would be important not to raise expectations that could not be met, whilst at the same time reassuring people that the OTS was not approaching these reviews with a particular agenda – the focus would be on identifying complexities and proposing solutions.

The Minister had also questioned the OTS about whether it had enough resources to handle the overall workplan. He had asked the OTS to consider the question of resources carefully, and to work with HM Treasury and HMRC to draw up final terms of reference for the new projects by the end of June.

The OTS secretariat had drawn up a resourcing plan and draft timetables and terms of reference for the new projects, and had discussed these with the relevant HM Treasury and HMRC policy teams.

The project plans and terms of reference were discussed in detail by the OTS Board, and some changes were made to the scope and timing of the projects as a result. It was important to make clear for all the OTS projects that the proposals would follow from evidence collected during a full and open consultation.

The OTS would approach the projects from the point of view of simplification and achievable results, whilst taking into account the Government’s policy objectives in the areas under review.

Dave Hartnett advised that any Government response to the OTS proposals would be made within the context of the new policy making framework – with draft legislation being published at least 3 months before the relevant Finance Bill. This meant that if the Government wanted to take forward any proposals for legislative changes arising from the two new projects then this would probably be in the 2013 Finance Bill.

Looking at the OTS resources, John Whiting thought there were sufficient secondees to complete the small business review, but new staff would be needed to take on the projects on share schemes and pensioner taxation. He had already been considering possible sources for secondees, and was optimistic that the OTS staffing position would be clear by September. Once final terms of reference were published, the OTS could advertise for secondees to carry out the projects.

The Board discussed possible membership for the Consultative Committees for the two projects. John Whiting asked the Board members to suggest names to him, and he would approach people once the final terms of reference for the projects were published.

Publishing the terms of references may prompt some individuals or organisations to put themselves forward as well.

4. New review – identifying complexity

Adam Broke offered to prepare a draft paper for the next Board meeting on the subject of complexity, building on the lessons learnt from the experience of the OTS’s first year.

The objective would be to help identify those areas of intense complexity in the tax code with the aim of helping to prioritise areas for the future work programme of the OTS for the rest of the Parliament.

5. Date of next meeting

The next meeting will be held at the Treasury on Thursday 22 September.