The Inland Revenue plans to devote a 40-strong team to a five-year project to rewrite 6,000 pages of tax legislation into plain English with the aim of making it easier to understand.
The move, confirmed yesterday by Michael Jack, the Financial Secretary to the Treasury, is a response to criticism of the complexity of the tax system in the run-up to the introduction of self-assessment. It follows the publication of a Revenue report, The Path to Tax Simplification, which suggests that making the language of the legislation simpler will reduce compliance costs for business and individuals.
Mr Jack said, in answer to a parliamentary question, that the development fitted in with the Government's deregulation initiative, the approach of self-assessment and continuing efforts to improve service, quality and cost-efficiency.
The development was broadly welcomed by tax practitioners who have argued that the complexity has made it difficult for them to advise their clients.
Ian Barlow, head of tax at the accountancy firm KPMG, said: "Business is finding it increasingly difficult to understand tax legislation. Tax simplification will provide more certainty and so reduce costs. This will help businesses and the economy as a whole. Practitioners will be able to advise their clients on their business plans much more effectively if tax law becomes clearer."
However, there are doubts about whether the plans will come to fruition. Gerry Hart, president of the Chartered Institute of Taxation, which has been heading the reform campaign, said that the scale and cost of the project - estimated at several million pounds - might lead to it being abandoned if there were a change of government. When Kenneth Clarke, the Chancellor, made a commitment to the plan in last month's Budget, Philip Davis of accountants Ernst & Young said it was "particularly disappointing" that the speech contained no real attempt to reach the goal of simplification.
Tax legislation has grown from a mere 180 pages at the end of the First World War to 345 new pages of new law in the 1994 Finance Act alone. The amount of legislation this year is expected to be on a similar scale.
Wholesale rewrites of tax legislation have already been undertaken in Australia and New Zealand. And the Revenue project is expected to take much the same approach of revising the structure without changing the policy.