During 2017-18 the agency, which was placed on a statutory footing in 2016, looked at the operation of the business VAT registration threshold, noting that it currently acts as a cliff edge which can deter some businesses from growing. Following the OTS’s report in November 2017 the Chancellor launched a full consultation at the Spring Statement.

Recognising that deciding which assets qualify for capital allowances can be complex, the OTS has explored the impact of moving to a simpler system, potentially relieving a wider range of assets, by using accounts depreciation. The report showed that while such a move was possible, it would be complex and result in losers as well as winners. As a result, the OTS recommended a number of changes to make the current arrangements more straightforward.

Work on the impact of the ‘gig’ economy on the tax regime has continued, with the OTS recently publishing recommendations for a PAYE regime for platforms.

The OTS has also begun a major review of inheritance tax (IHT) and has already received more than 3,000 responses from the public to an online survey, plus over 100 responses from the tax community to its call for evidence. It is due to report in the autumn.

According to its annual report, currently 200 recommendations remain the subject of ongoing discussion with HMRC. Within this total, 64 are already being pursued, either through government action (such as a policy consultation) or further work by the OTS, and an additional 91 remain under consideration for potential action in due course.

Looking ahead, an OTS project on HMRC guidance is also due to report in the autumn and further work is planned to develop and expand on key areas highlighted in the business lifecycle review, as well as ongoing consideration of the role and impact of technological changes.

In the annual report, the OTS said it is ‘particularly interested in the tax issues which arise for individuals as they go through life’ and noted that ‘a question we are keen to consider is the extent to which reliefs can be provided automatically rather than by means of a claim’.

On the issue of technology, the OTS states: ‘Although HMRC is heavily engaged on Making Tax Digital in the near future, we see huge opportunities beyond that for processes which can dramatically improve the user experience.

‘Pre-population of returns, the use of machine learning, more interactive and real-time ways of providing information and data to HMRC and more intensive use of mobile technology will all provide ways of improving the user experience.

‘Some of the deeper questions which will need to be addressed include whether technology should be deployed to “paper over the cracks” of the underlying complexity, the extent to which every taxpayer should be able to understand the underlying computations and the degree to which a taxpayer might become disengaged from the tax system if everything is done for him or her.’

Mel Stride, financial secretary to the Treasury, said: ‘The Office of Tax Simplification continues to make a valuable and increasingly visible contribution to the public debate around tax and how to make people’s experience of engaging with the system simpler. The government welcomes this and will continue to carefully consider its advice.’

Office of Tax Simplification annual report 2017 – 18 is here.

Report by Pat Sweet