Philip Hammond was invited by the Neville Reyner, CBE, President of the British Chambers of Commerce to make a few opening remarks. He explained that the Tories objective was in the medium term to reduce tax and it was now accepted by the public at large that business needed tax breaks. The Tories would however be in a difficult fiscal position if they won the next election; thus any changes for the time being had to be self-financing.

They intend to reduce the rate of corporation tax from 28% to 25% and to pay for this by reducing capital allowances. They will also reverse the increase in the small companies' rate of corporation tax.

Of course I was waiting with baited breath, to hear what measures they proposed for simplifying tax. The only things that came out were:

• a reference to the current inordinate length of our legislation


• a reference to the fact that tax is complex for business to operate but that there is not necessarily any benefit to Government in reducing the complexity; I took it, however, that there would not be any bar to simplification provided that it did not cost them anything!

There was an undertaking that in future they would announce their intentions before introducing detailed legislation in order that there could be more debate and consultation. This would better ensure that the actual legislation would achieve its stated purpose and would avoid the embarrassing u-turns that have been a feature of recent Finance Bills.

Those present did manage to get the Shadow Minister to consider the formal introduction of a de minimis limit for small items of capital expenditure which could be expensed for tax purposes. This in itself will save businesses hours spent in producing analyses of very small capital items which they write off for accounts purposes, but then have to be added back for tax purposes, and capitalised.

Other responses to questions from the floor revealed that:

• they have no plans for a general anti-avoidance provision


• they believe that the attack on income shifting between husband and wife was politically motivated and they will not, therefore, be reviving this issue if they come to power


• apart from reversing recent increases in the small companies rate of corporation tax they have no plans to further reduce the rate below 20%


• they will announce planned tax changes in advance but will not set out their entire tax agenda at the start of Parliament.

Once again all very interesting but nothing much about tax simplification. This is such an important topic for all businesses that I have decided that the only course open to me is to write to the British Chambers of Commerce and Philip Hammond MP setting out some tax simplification ideas. These will be posted on my blog tomorrow.