1.1 In December 1995 the Inland Revenue published a report ("The Path to Tax Simplification") reviewing the scope for simplifying the UK tax system. This report concluded "... that the language of existing tax law can be simplified; that the benefits should substantially outweigh the costs; and that a rewrite of most of the existing code could be accomplished over a period of about five years". That judgement had been foreshadowed in the then Chancellor of the Exchequer's statement, in his Budget Speech of 28 November 1995, that he hoped to "make a start on a major project to simplify tax legislation" in 1996.
1.2 This announcement was generally very well received. But, before a final decision could be taken, a number of important practical issues needed to be clarified. In July 1996, we published a consultative document ("Tax Law Rewrite: The way forward") with detailed proposals for taking the project forward.
1.3 After a very constructive and worthwhile round of consultations with the main interested parties, we published a response document in December 1996 ("Tax Law Rewrite: Plans for 1997"). This outlined how, in the light of comments received, we would take forward the rewrite work. In May 1998 we published a further document setting out our programme for 1998/99 ("Tax Law Rewrite: Plans for 1998/99"). The project is now fully under way and this Exposure Draft contains the second batch of draft rewritten legislation for consultation with interested parties. We have also published two Technical Discussion Documents.
1.4 The project will rewrite all (or most) of the United Kingdom's existing primary tax legislation in order to make it clearer and easier to use, without changing or making less certain its general effect.
1.5 The work is organised on project lines, and we have identified six critical success factors which must all be fully achieved if the project is to be judged a success. In some cases, we will not be solely or even mainly responsible for ensuring that these are met, but we will have a contribution to make to all of them at appropriate times. The six critical success factors are as follows.
1.6 From these high level objectives, a detailed project plan has been developed and this is used to keep track of progress.
The project team
1.7 We have set up a separate project team to carry out the rewrite of tax law. The team currently has the following structure:
1.8 One member of the drafting team works closely with each rewrite team on the actual rewriting of the legislation. Each rewrite team has three members from the Inland Revenue - a tax inspector, a lawyer and someone with a tax policy background - and also someone from the private sector who provides vital input from an outside perspective.
1.9 We are taking an innovative approach to the work in several ways. It is unusual for members of the Inland Revenue Solicitor's Office to be dedicated full-time to the preparation of legislation. It is a new departure for people with a private sector background to be involved in such work. And there are no precedents for Parliamentary drafters to be so closely involved, on a day to day basis, in the process.
1.10 The main role of this Committee - which is chaired by Lord Howe of Aberavon - is to provide strategic guidance to the project. It needs to satisfy itself that the project is meeting its objectives of clarity and user-friendliness and is taking full account of private sector concerns.
1.11 The Committee clearly cannot scrutinise the rewritten legislation line by line to testify to its accuracy. Ultimately that is the responsibility of the project team. But it can verify that the project is being properly managed and has in place all the necessary processes to ensure that these objectives can be met. This will assure Ministers, Parliament and the outside world about the quality of the rewrite, thereby smoothing the passage of the rewrite Bills in Parliament.
1.12 Taxpayers and the professions (accountants, lawyers, etc.) are involved in the rewrite through the Consultative Committee. This has three elements:
1.13 The role of the Committee is to ensure full consultation on the rewritten tax law with all the relevant private sector interests.
1.14 To provide a link between the two Committees, a representative of the private sector side of the Consultative Committee attends meetings of the Steering Committee as deputy chairman of the Consultative Committee, together with the Inland Revenue Project Director and other project team members as appropriate.