Creating greater transparency and clarity can only be better for both the tax payer and tax administrations, says ACCA (the Association of Chartered Accountants) today in response to Government proposals to combine income tax and national insurance payments in one single figure.
Earlier this year, ACCA conducted research into the UK public’s understanding of the tax system, which showed that:
- Over 90% of respondents were unaware of the full impact of indirect taxes on their paypacket (an additional 22% of the average salary is spent on other taxes after income tax has been deducted)
- There is widespread confusion as to items affected by VAT
- Only 14% knew the state retirement age for men and women would be from 2020
- Only 47% of respondents had checked their tax code with HMRC despite well-publicised coding problems that have led to tax over- and under-payments
Chas Roy-Chowdhury attended the Government briefing today (14 November) and says: 'Policy-wise we need to strive towards a tax system which people understand and do not feel disenfranchised from- essentially we need a tax system which does exactly what it says on the tin.
'People should have a right to know exactly what their tax rate is and why it is that rate. And while proposals for change are being made, we should show taxpayers much more clearly what their tax deductions are being spent on rather than keeping it wrapped up in the publication of the Budget Red Book – which not a lot of people have the time to source or search through.
'Modernising the Administration of the Personal Tax System is an important document and we’d urge people to take part; but we shouldn’t forget the fact that businesses need a simple tax system too,' concludes Chas Roy-Chowdhury.
In relation to National Insurance Contributions (NIC) and Income Tax (IT) CRC said: 'If we had a different starting point we would have encouraged a merger of the two taxes but as things stand we welcome all possible moves to align and simplify the two regimes. But we would NOT welcome a merger as pensioners and the self-employed among others could lose out enormously.
We will seek to work closely with the Government on these two worthwhile and difficult initiatives.'
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Notes to Editors
- ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
- We support our 147,000 members and 424,000 students in 170 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 80 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence.
- Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.