Announcements from the Office of Tax Simplification

Announcements from the Office of Tax Simplification

The OTS has published a strategy document and terms of reference for reviews of the CT computation and IT/NIC alignment.

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On 12 May 2016, the Office of Tax simplification (OTS) published three documents. The first is a strategy consultation document which sets out, and seeks views on, how the OTS thinks it should develop and operate as a permanent statutory body (following changes being introduced by the 2016 Finance Bill). The others are terms of reference for two forthcoming projects: a review of the corporation tax computation and a second phase review of income tax and national insurance alignment.

The strategy document explains that the OTS plans to:

  • set out how new trends and changes in business and employment (such as the sharing economy) will impact on tax;
  • consider how to make tax simpler given these changes to how we work;
  • reviews areas integral to these trends and identify difficult issues where an informed discussion is required;
  • take the issues and options out for wide discussion and evidence gathering;
  • encourage simplification to be built into tax policy making and implementation early on in the process; and
  • engage closely with HMRC on its important digital agenda.

A stakeholder event will also be held on this subject on 18 July.

The review of the corporation tax computation aims to develop recommendations on how to simplify the computation and reduce the administrative burdens it imposes. The intention is to provide an update on progress before the 2016 Autumn Statement and produce a report with these recommendations before Budget 2017.

An earlier report from the OTS on closer alignment of income tax (IT) and NICs, published in March 2016, concludes that bringing IT and NICs closer together would create a simpler and more equitable system for taxpayers, better fitted for current and emerging working patterns. The Government has now asked the OTS to undertake two further reviews:

a review on the impact of moving employee NICs to an annual, cumulative and aggregated basis similar to PAYE IT. NICs is currently calculated on a pay period basis; and

a review on the reform of employer NICs to a payroll based charge.

The aim is to publish its findings in advance of Autumn Statement 2016.

For further information please contact :

Sharon Baynham

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