Menu
Tue, 28 May 2024

Newsletter sign-up

Subscribe now
The House Live All
Communities
Harnessing North East Devolution Partner content
By Port of Tyne
Communities
Construction sector could cut prison leaver unemployment with right support Partner content
Economy
How the next Government can start planning for growth Partner content
Economy
Communities
Press releases

Treasury Minister Vows To Simplify Taxes In A Bid To Boost Growth

Treasury minister Victoria Atkins has said simplifying taxes will help stimulate economic growth. (Alamy)

3 min read

Victoria Atkins, financial secretary to the Treasury, has issued a pledge to simplify taxes, underscoring government's efforts to boost the economy, insisting that doing so would "support growth" and make tax "fairer".

The renewed commitment for tax simplification follows a Treasury committee in a report in June which said the UK's tax system needed simplification and currently acts as an “obstacle to economic dynamism”. 

The committee said the UK’s overcomplicated tax system creates compliance burdens, confusion and disincentives for businesses – with the committee chair, Tory MP Harriett Baldwin, warning the "tax system is over-complicated, confusing and inefficient". She believed it "contains numerous cliff edges which disincentivise work, business growth and personal development". 

During Kwasi Kwarteng's brief stint as Chancellor in September 2022, in which he and then-Prime Minister Liz Truss presided over economic chaos with a mini-budget, the Treasury announced plans for an Office for Tax Simplification (OTS). While the OTS was scrapped along with Kwarteng and Truss, tax simplification remains under the Treasury's remit.  

With Jeremy Hunt now in the Chancellor's seat, government has already started rolling out a raft of tax simplifications, with its most high profile announcement so far on simplifying tax on alcohol – taxing drinks by strength and moving away from a duty system which had multiple rates and was more arbitrary. 

Atkins has now told PoliticsHome that she and the chancellor have "put tax simplification at the heart of tax policy design and implementation" and that it remains a priority moving forward. 

“This will be achieved in many different ways – for example, we are cutting paperwork for traders and small businesses, we have built HMRC’s new app to enable taxpayers to settle their taxes quickly and easily, and our recent pension changes have removed tax barriers, helping senior doctors and others remain in work," Atkins said.

“I want people and businesses to earn money, create jobs and grow our economy, rather than worry about tax. These measures and more will help us achieve this.”

Tax simplification measures also include increasing the pensions Annual Allowance from £40,000 to £60,000 per annum thereby reducing the number of taxpayers that need to report and pay pensions tax.

The government is also reforming customs import and exports processes, including reviewing customs declaration requirements to see where they can be streamlined and digitising HMRC’s authorisation processes for a range of customs facilitations. 

The Treasury has also introduced the Self Assessment threshold for people taxed only through PAYE only will change from £100k to £150k beginning from the tax year 2023/24.

In its aims for the coming months, the government plans to deliver IT systems capable of allowing tax agents to payroll benefits in kind – benefits employees receive from their employer which aren't part of their salary – to reduce administrative burdens on employers from April 2024. 

The Treasury is also working with businesses and representative bodies until April 2025 to review tax guidance and forms for small businesses to simplify interacting with the tax system to help them grow – including step-by-step interactive guidance for users.

PoliticsHome Newsletters

PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe

Read the most recent article written by Nadine Batchelor-Hunt - Food Bank Provider Challenges Parties To Commit To Benefit Debt Reform

Categories

Economy
Podcast
Engineering a Better World

The Engineering a Better World podcast series from The House magazine and the IET is back for series two! New host Jonn Elledge discusses with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

NEW SERIES - Listen now