Budget 2015: Review of new legislation

Budget 2015: Review of new legislation

KPMG offer suggestions on how new tax rules could be improved.


Tax Partner - Head of EU Tax Group

KPMG in the UK


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Parliament and Big Ben

Ensuring legislation is well drafted and that issues arising post-implementation are picked up quickly are key in ensuring both that measures achieve stated policy aims and that taxpayers have confidence in the UK tax system and in HMRC’s ability to administer that system in practice. 

Inour opinion, the publication of draft Finance Bill clauses for open consultation has been both a welcome and a successful step, allowing greater input from taxpayers and advisers before a measure becomes law. However, not all measures can be published in advance in this way, and even extensive advance consultation may not pick up practical issues (both for taxpayers and HMRC) which only become clear as new legislation takes effect.

We therefore, suggest the following changes to further improve the efficiency and implementation of new legislation.  

OTS scrutiny of draft legislation

The remit of the Office of Tax Simplification should (OTS), in our view, be extended to include a review of all draft legislation. This should supplement, not replace, the current tax policy framework to provide a valuable additional perspective on the draft.

An alternative to this would be for the OTS to review all new legislation for simplification once it has been implemented (and ideally within the two year period outlined below).

Post-implementation reviews

We acknowledge that it is currently possible for specific pieces of legislation to be reviewed once they have been implemented, and, specifically, we view the post-implementation review of Real Time Information (RTI) announced in December 2014 as a very welcome step in addressing the practical issues facing employers. However, taxpayers cannot currently rely on there being a review of new legislation, or on any review taking place early enough to minimise practical issues arising. We propose the introduction of a formal review of new legislation to see if it is achieving its stated aims and intention. This should be after a fixed period which allows adequate time for problems to become evident, while still addressing them promptly: a good option might be to set the review period at two years from the date the first returns relying on new legislation are due.

Temporary Easements

HMRC should be allowed to alleviate unexpected taxation by way of temporary easements followed by legislation (within two complete tax years of the announcement of the easement). This would ensure unexpected consequences could be rectified quickly while providing a statutory basis for legislative improvements.


This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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