Taxing times ...

By Carol Barrie on Aug 7, 08 02:56 PM in Tax

By now the 2008 Finance Bill will have received Royal Assent and become the 2008 Finance Act.

Why does this have to be? Income tax is a temporary tax that has to be re-imposed every year. The Provisional Collection of Taxes Act only allows Government to collect tax up until 5 August in any year unless by then the Finance Act has re-imposed income tax.

It is for this reason that there is a four month mad scramble to publish the Finance Bill and get it through all of its stages and into legislation by the end of July. The Parliamentary draughtsman is under huge pressure to produce the Finance Bill quickly, no matter how late in the day that Government decides that it wants to make changes, and no matter how complicated they are.

But it doesn't end there, ...

certain clauses of the Bill are dealt with by the entire House of Commons; but many are dealt with in Standing Committee. That is a committee of MPs usually with no specialist tax knowledge who debate the more complex provisions.

The last sitting of the 2008 Finance Bill Standing Committee was on Thursday 19 June and commenced at 9am. According to the Committee minutes the Chairman became quite perturbed by late afternoon because he had been assured by the Whips of both parties that the business of the Committee would be finished in a reasonable time, for members who had to return to their constituencies that evening. In the event it was near 9:30pm before the Committee completed its' work.

Twelve and a half hours of debate on complex litigation would 'tax' (forgive the pun) the brain and the staying power of seasoned tax professionals used to dealing with tax legislation day in and day out. What chance is there for MPs, with no specialist knowledge, keen to get home to their constituencies before midnight?

I don't begrudge the MPs the benefit of getting home at a reasonable hour but is this really a sensible way to bring in often complex legislation which can have a profound effect on so many tax payers?

Hasn't the time come to breathe a bit of common sense into the system and deal with complex technical changes separately from the matters that have to be passed by Parliament by 5 August, so that we all go on paying our taxes?

This would allow more consultation with tax professionals; better drafting and more informed and considered debate by Parliament.

The tax professional bodies have been pressing for this for some time but without success. It is now time that the rest of the population are included in this debate which affects us all so profoundly.