Tax law rewrite project
Encyclopedia
The Tax Law Rewrite Project of HM Revenue and Customs was a major effort to re-write the entire tax legislation of the United Kingdom
in a format which is both more consistent and more understandable. It aimed to remove archaic language and impenetrable terminology from tax law and to replace it with modern language and terminology.
The project was initiated in 1997 and produced five pieces of primary legislation
and one piece of secondary legislation. A sixth and seventh bill went before Parliament. The project focussed purely on primary legislation but special dispensation was given to the re-writing of the regulations governing PAYE
by the project.
The project began its work with the legislation covering capital allowances and the first legislation passed thanks to the project was the Capital Allowances Act 2001. The project then moved on to consider income tax
. Three pieces of primary legislation relating to income tax—the Income Tax (Earnings and Pensions) Act 2003, the Income Tax (Trading and Other Income) Act 2005
and the Income Tax Act 2007
—have been passed by Parliament. Their main change is to remove the concept of schedules from British income tax law. Previously income was assessed in one of six schedules (labelled from A through to F) depending on its source. The schedules have been replaced with everyday terminology. For example Schedule A income is now referred to as property income and Schedule E income is now referred to as employment income.
It was felt that in addition to the primary legislation necessary for the project that one piece of secondary legislation would need to be rewritten. The PAYE system is intimately linked with income tax in British law and consequently the legislation governing it was dealt with by the project. The result was the Income Tax (PAYE) Regulations 2003.
Following the passage of the Income Tax Act 2007 attention was turned to corporation tax. The Corporation Tax Act 2009
applies to accounting periods ending on or after 1 April 2009. Two further bills were enacted in 2010 – the Corporation Tax Act 2010
and the Taxation (International and Other Provisions) Act 2010
. Once these bills were enacted the Tax Law Rewrite Project was disbanded in April 2010 - see ICAEW report.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
in a format which is both more consistent and more understandable. It aimed to remove archaic language and impenetrable terminology from tax law and to replace it with modern language and terminology.
The project was initiated in 1997 and produced five pieces of primary legislation
Primary legislation
Primary legislation is law made by the legislative branch of government. This contrasts with secondary legislation, which is usually made by the executive branch...
and one piece of secondary legislation. A sixth and seventh bill went before Parliament. The project focussed purely on primary legislation but special dispensation was given to the re-writing of the regulations governing PAYE
PAYE
Pay as you earn or PAYE refers to a system of withholding of income tax from payments to employees. Amounts withheld are treated as advance payments of income tax due. They are refundable to the extent they exceed tax as determined on tax returns. PAYE may also refer to withholding of the...
by the project.
The project began its work with the legislation covering capital allowances and the first legislation passed thanks to the project was the Capital Allowances Act 2001. The project then moved on to consider income tax
Income tax
An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...
. Three pieces of primary legislation relating to income tax—the Income Tax (Earnings and Pensions) Act 2003, the Income Tax (Trading and Other Income) Act 2005
Income Tax (Trading and Other Income) Act 2005
The Income Tax Act 2005 is an Act of the Parliament of the United Kingdom.It restated certain legislation relating to income tax, with minor changes that were mainly intended "to clarify existing provisions, make them consistent or bring the law into line with well established practice." The Bill...
and the Income Tax Act 2007
Income Tax Act 2007
The Income Tax Act 2007 is an Act of the Parliament of the United Kingdom. It is the primary Act of Parliament concerning income tax paid by individual earners subject to the law of United Kingdom, and mostly replaced the Income and Corporation Taxes Act 1988.-Contents:*Part 1 Overview*Part 2...
—have been passed by Parliament. Their main change is to remove the concept of schedules from British income tax law. Previously income was assessed in one of six schedules (labelled from A through to F) depending on its source. The schedules have been replaced with everyday terminology. For example Schedule A income is now referred to as property income and Schedule E income is now referred to as employment income.
It was felt that in addition to the primary legislation necessary for the project that one piece of secondary legislation would need to be rewritten. The PAYE system is intimately linked with income tax in British law and consequently the legislation governing it was dealt with by the project. The result was the Income Tax (PAYE) Regulations 2003.
Following the passage of the Income Tax Act 2007 attention was turned to corporation tax. The Corporation Tax Act 2009
Corporation Tax Act 2009
The Corporation Tax Act 2009 is an Act of the Parliament of the United Kingdom. It restated certain legislation relating to corporation tax, with minor changes that were mainly intended "to clarify existing provisions, make them consistent or bring the law into line with well established...
applies to accounting periods ending on or after 1 April 2009. Two further bills were enacted in 2010 – the Corporation Tax Act 2010
Corporation Tax Act 2010
The Corporation Tax Act 2010 is an Act of the Parliament of the United Kingdom that received Royal Assent on 3 March 2010.It was first presented in the House of Commons on 19 November 2009 and received its third reading on 4 February 2010...
and the Taxation (International and Other Provisions) Act 2010
Taxation (International and Other Provisions) Act 2010
The Taxation Act 2010 is an Act of Parliament in the United Kingdom that aims to ‘restate, with minor changes, certain enactments relating to tax; to make provision for purposes connected with the restatement of enactments by other tax law rewrite Acts; and for connected purposes’....
. Once these bills were enacted the Tax Law Rewrite Project was disbanded in April 2010 - see ICAEW report.
External links
- Tax Law Rewrite Project: HM Revenue and Customs