Hunt urged to 'think twice' about closing Office of Tax Simplification

MPs says closure is "unnecessary", pointing to OTS claim that it "achieves far more than it costs"
Photo: Jason Taellious/Flickr/CC BY-SA 2.0

By Tevye Markson

14 Mar 2023

MPs have called on the chancellor to “think twice” before closing the Office of Tax Simplification, arguing it “achieves far more than it costs”. 

The Treasury Committee has written to chancellor Jeremy Hunt, asking him to explain why he believes the Office of Tax Simplification should be abolished.

Former chancellor Kwasi Kwarteng announced the closure of the OTS in September’s tumultuous "mini-budget".  

Hunt, who took over from Kwarteng in October, did not overturn the decision in the Autumn Statement. Earlier this month, OTS chiefs confirmed they expect the office to be formally abolished through the finance bill that will follow tomorrow’s spring budget.

The office stopped its work in December, following its review of hybrid and distance working. GOV.UK says the OTS “has closed” but parliament will need to approve the closure before it can be officially disbanded. 

In a recent Treasury Committee evidence hearing, OTS chair Bill Dodwell argued against the closure, saying the government would “lose a champion for simplification” and  “the country would be better off if it retains us than if it abolishes us”.

“We are not an expensive body, and we have done good work,” Dodwell added.

In a statement ahead of the budget, Harriett Baldwin, chair of the Treasury Committee, said Dodwell's comments were evidence that the OTS “achieves far more than it costs” and urged the chancellor to “think twice before forging ahead with a potentially unnecessary closure.” 

This statement followed Baldwin's letter to Hunt, asking for the “full thinking” behind his decision to proceed with the closure of the OTS.

The letter asked what analysis he has seen that supports his decision to continue with the office’s abolition and whether he believes the OTS has succeeded or not in delivering the necessary simplification of tax. 

Baldwin also asked what steps are being taken to ensure that work to simplify the tax system would continue in the absence of the OTS. 

“What resources will be allocated to tax simplification within the Treasury and HMRC? Which minister will hold responsibility for it? Which metrics will the government use to assess its performance?” she added.

A Treasury spokesperson said: “The Office for Tax Simplification was established to help the government achieve an important objective and the government is grateful for its valued contributions and influence on the tax debate.

“Tax simplification remains a crucial objective - the government wants the tax system to be simple, fair and to support growth.”

The Treasury confirmed that the chancellor has received the letter from the Treasury Committee and will respond following the Spring Budget.

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