The Tax Law Rewrite Project of

HM Revenue and Customs HM Revenue and Customs (His Majesty's Revenue and Customs, or HMRC) is a non-ministerial government department, non-ministerial Departments of the United Kingdom Government, department of the His Majesty's Government, UK Government responsible fo ...

was a major effort to re-write the entire tax legislation of the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...

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.

History

The project was set up in 1996 and produced five pieces of

primary legislation Primary legislation and secondary legislation (the latter also called delegated legislation or subordinate legislation) are two forms of law, created respectively by the legislature, legislative and executive (government), executive branches of ...

and one piece of

secondary legislation Primary legislation and secondary legislation (the latter also called delegated legislation or subordinate legislation) are two forms of law, created respectively by the legislative and executive branches of governments in representative democra ...

. 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 A pay-as-you-earn tax (PAYE), or pay-as-you-go (PAYG) in Australia, is a withholding of taxes on income payments to employees. Amounts withheld are treated as advance payments of income tax due. They are refundable to the extent they exceed tax as ...

by the project. The project began its work with the legislation covering

capital allowance Capital allowances is the practice of allowing tax payers to get tax relief on capital expenditure by allowing it to be deducted against their annual taxable income. Generally, expenditure qualifying for capital allowances will be incurred on speci ...

s and the first legislation passed thanks to the project was the Capital Allowances Act 2001. The project then moved on to consider

income tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable 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 The Income Tax (Trading and Other Income) Act 2005 (c 5) 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, ma ...

and the

Income Tax Act 2007 The Income Tax Act 2007c 3 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 Corporat ...

—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 An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...

. Following the passage of the Income Tax Act 2007 attention was turned to

corporation tax A corporate tax, also called corporation tax or company tax, is a direct tax imposed on the income or capital of corporations or analogous legal entities. Many countries impose such taxes at the national level, and a similar tax may be imposed a ...

. The

Corporation Tax Act 2009 The Corporation Tax Act 2009 (c 4) 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 ...

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 The Taxation (International and Other Provisions) Act 2010 is an Act of Parliament Acts of Parliament, sometimes referred to as primary legislation, are texts of law passed by the legislative body of a jurisdiction (often a parliament or co ...

. Once these bills were enacted the Tax Law Rewrite Project was disbanded in April 2010 – see

ICAEW The Institute of Chartered Accountants in England and Wales (ICAEW) is a professional membership organisation that promotes, develops and supports chartered accountants and students around the world. As of July 2022, it has over 198,000 members ...

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The legislation was scrutinized by the

Joint Committee on Tax Law Rewrite Bills The Joint Committee on Tax Law Rewrite Bills was a joint committee of the Parliament of the United Kingdom. The remit of the committee was to scrutinise bills intended to make the language of tax law simpler, while preserving the effect of the exis ...

References

* * {{Cite report, title=Review of Rewritten Income Tax Leglislation, url=https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/344921/report104.pdf, author=Iposos MORI Social Research Institute, date=June 2011, publisher=HM Revenue and Customs, access-date=13 May 2020

External links

Tax Law Rewrite Project
HM Revenue and Customs Taxation in the United Kingdom Law of the United Kingdom 1997 establishments in the United Kingdom Tax law Law reform in the United Kingdom