MPs hear from Office of Tax Simplification ahead of its closure
The Treasury Committee will hear from the leadership of the Office of Tax Simplification (OTS) at 2.15pm on Wednesday 1 March, as it continues its inquiry into tax reliefs.
The independent advisor to the Government on simplifying the tax system, the OTS’ closure was announced by the then-Chancellor Kwasi Kwarteng at the September 2022 ‘mini-budget’. Its closure will take effect when the Spring Finance Bill 2023 receives Royal Assent.
Likely areas of questioning
The Committee will consider the OTS’ successes and failures since it was set up in 2010, as well as exploring what the consequences of its closure could be.
MPs will also use the session to examine the OTS’ scrutiny of tax reliefs. In 2011, the OTS identified that over 1,000 tax reliefs existed. They recommended the abolition of 47 different reliefs, 43 of which the Government did abolish.
Witnesses’ views are likely to be sought on whether the foregone revenue and distortion to the economy from tax reliefs are outweighed by the economic or social benefits they bring, as well as what policy options the Government could undertake to improve the system.
The Committee’s inquiry has received evidence that certain tax reliefs may be abused, including allegations of £1.1 billion of fraud and error within research and development tax reliefs over the past three years. MPs are likely to scrutinise whether abuse of tax reliefs is a problem, what makes tax reliefs prone to abuse, and which may be particularly susceptible.