In an ongoing effort to modernise the tax system through The Making Tax Digital Initiative, to-date there has been minimal focus on simplifying Corporation tax. The Office for Tax Simplification has published their recommendations on simplifying the corporation tax computation, setting out significant steps towards creating a 21st-century corporation tax system in the UK. The report looks at four broad themes:
1. simpler tax for smaller companies
2. aligning the tax rules more closely with accounting rules
3. simplifying tax relief for capital investment
4. Resolving a range of issues affecting the largest companies.
All of this is especially timely in the context of HMRC’s Making Tax Digital proposals, providing the push to design a much simpler tax system, especially for the smallest companies, to reduce their administrative burden alongside more frequent reporting to HMRC.