Fears of chaos in tax system

THE British tax system is 'in grave danger of collapsing' under the weight of new legislation, the president of the Institute of Taxation warned yesterday.

Ian Luder, who is also a tax partner with the accountants Arthur Andersen, called for a two-year freeze on all but essential new legislation while a Royal Commission was established to examine the entire direct tax system.

'We cannot afford another five years of complex legislation of the volume we have suffered over the past five years,' Mr Luder told the Institute's annual conference in Nottingham.

Earlier, he said: 'It's getting to the stage where fewer and fewer people understand less and less of tax legislation, and that's not a healthy situation.' In the past 12 months, more new law had been enacted than in the first four years of the Thatcher era. 'You get to a situation when the experts can't understand it. Even the Inland Revenue can't understand it.'

Mr Luder said the coming Schedule E self-assessment provisions, expected in the next Budget, would impose additional burdens and responsibilities on employers to provide information to their employees.

'We recognise the necessity for this if individual taxpayers are to be in a position to have the necessary information to complete their own tax returns.

'However, if ministers are serious about deregulation and lifting the burden from business, changes need to be made to the Victorian expenses rules.

'We need to treat employers as responsible. Most businesses today do not seek to use travel and subsistence expenses as a backdoor means of paying additional remuneration - they are driven by cost control.'