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OTS recommends five tax reliefs for the axe

OTS recommends five tax reliefs for the axe

On the 13rd December, the Office of Tax Simplification published its interim review of 13 reliefs, providing some light reading for online accountants.

The interim review included CGT relief on the disposal of private houses, income tax relief on luncheon vouchers, tax relief on research and development and VAT relief on supplies and sales for charities.

Of the 13 reliefs, the OTS decided that five should be axed including the luncheon voucher relief and the tax break for workers who get a taxi home after working late. The OTS says the taxi break, which was introduced in 1987, is unfair. It is used frequently by financial services and legal firms who want employees to stay at work late to complete urgent projects, but it is not available for shift workers travelling at night unless they have to work later than usual.

Another relief that could go is the vaccine research relief which Gordon Brown introduced in 2002. It was designed to encourage research into HIV/AIDS, malaria and tuberculosis but only 10 companies are allowed to claim it. The OTS says the relief is very rarely used and there is no evidence that additional research into vaccines for the named diseases has been undertaken.

The OTS has identified a total of 1,042 separate tax reliefs and is now going to focus on 74 in a final review.

The Institute of Chartered Accountants of Scotland is also urging the OTS to recommend merging income tax and NICs. This would lead to less administrative costs for both HMRC and businesses, according to the Institute.

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Image: Ahhhhh!!! by kennymatic

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