Tax and taxis
General Tax

‘I had that Christopher Marlowe in my boat once.’ (Taxi-Boatman in ‘Shakespeare in Love’, screenplay by Marc Norman and Tom Stoppard)
It seems from an article in the Daily Telegraph that the story of London black cabs really did begin on the Thames. From Anglo-Saxon times, watermen charged to row customers across the river. Christopher Wren used to take a ‘water taxi’ daily from his home in Bankside across to St Paul’s when he was building the cathedral.
Of course neither the Bard nor the great architect could have envisaged the iconic status that the London taxi would subsequently acquire. For those who might be curious as to the origin of the words ‘tax’ and ‘taxi’, the two are indeed etymologically linked, both coming from the Greek verb ‘tasso’, meaning to put in an order, to fix the value of a thing.
The coalition Government has said it wants to simplify the tax system and, somewhat predictably, has created a special office to do so. The imaginatively titled Office of Tax Simplification (OTS), headed by former Financial Secretary to the Treasury, Michael Jack, has been asked to conduct two initial reviews – one of all tax reliefs, and another of small business taxation.
In December 2010, the OTS published an interim report on its review of tax reliefs. There are 1042 reliefs currently available, and ‘for the first time all tax reliefs administered by HMRC have been compiled and made available in a single document.’ We tax anoraks live in exciting times!
The OTS has taken a sample of 13 reliefs to establish a ‘methodology’ which will be applied to the 149 reliefs it intends to scrutinise. The other 883 (which include all the VAT reliefs) are being put on the back burner. Of the 13 in the sample, the OTS recommends that three reliefs should be retained, five should be simplified, and five could be abolished.
Among the candidates for relegation are the 15p a day luncheon voucher relief, along with Millennium Gift Aid, Vaccine Research Relief, and the exemption for the first £70 of interest on an NSB ordinary account. Given that no-one has time for ‘luncheon’ anymore and 15p a day would barely keep you in Pringles, it’s not surprising that this relief is ear-marked for the bin. Millennium Gift Aid expired at the end of 2000, the NSB no longer offers ordinary accounts and Vaccine Research Relief only applies to three diseases. Hardly an earth-shattering conclusion after five months’ work.
The last of the five being considered for the chop is the relief for late night taxis home from work, where, subject to certain conditions, an employer can currently pay for up to 60 trips a year, without the employee being subject to tax on the benefit.
Somewhat spookily, one of the reliefs recommended for retention is the relief from income tax for members of overseas teams competing in the UEFA Champions League Final in 2011. This is on the grounds that the costs ‘are estimated to be zero as it may not have been possible to host the event without the relief’. A strange conclusion.
Your New Year’s Quiz: What do the following have in common?
Angostura Bitters, black beer, coal and smokeless fuels (or equivalent allowance) provided by a colliery to its miners, Apsley House, divers and diving supervisors and pet cemeteries.
Answer next time. Until then, let me have your suggestions.
*** UPDATE – May 2011 ***
On 7 March 2011 the OTS published its final report on tax reliefs. The 45 reliefs which the OTS recommended should be scrapped included late night taxis, luncheon vouchers, miners’ free coal, angostura bitters, black beer, Millenium Gift Aid, and NSB interest.
Of the reliefs I mentioned by name in the blog, two (Millennium Gift Aid and NSB interest) are to be abolished in the Finance Act 2011, two more (luncheon vouchers and late-night taxis) in the FA 2012 ‘after consultation’. Consultation about what, if the decision has already been taken?
Another two (angostura bitters and black beer) are to be abolished some time after 2012. Perhaps George is planning a distinctive Olympic cocktail!
Miners’ free coal and pet cemeteries appear to be safe. Too hot to handle, eh George?

Tax lawyer specialising in business tax, SDLT and VAT