The UK used to have an Office for Tax Simplification (OTS), created in 2010 to give the UK government the independent advice on simplifying the tax system.
In 2022, the OTS issued a report Review of simplification: Approach and interpretation OTS Simplification Review – web copy (publishing.service.gov.uk)
A few months later, the UK government abolished the OTS.
Definitions in UK tax law
As the following quotation from the report says, one thing the OTS report highlighted was that UK tax legislation often uses:
- different defined terms to cover broadly similar subject matter.
- the same defined term to mean slightly different things in different places.
“1.22 One important area for clarity is the use of different defined terms to cover broadly similar subject matter, and of the same defined term used to mean slightly different things in different provisions. Naturally, differing policy intent will lead to multiple definitions; but having too many creates complexity and the opportunity for misunderstanding. The opportunity should always be taken to consider re-using an existing definition in its entirety.”
The OTS report does not say more on definitions, but the OTS did provide more detailed discussion in 2017 in its paper Office of Tax Simplification Complexity project: Definitions in tax legislation and their contribution to complexity https://assets.publishing.service.gov.uk/media/5a756321ed915d6faf2b2963/OTS_definitions_paper_updated_Feb17.pdf
In the rest of this post, I pick up some points from the 2017 paper.
Suggestions in the 2017 paper
- Policy makers and drafters should focus more on definitions.
- Definitions should be consistent where possible, and should not be over-used.
- The same label should not be used for different definitions.
- Allowing definitions to proliferate may make things more difficult for the user.
- If a draft definition is designed to meet a policy objective but differs from an existing definition, drafters should assess whether the objective can be meet without creating that difference.
Features of good definitions
The 2017 paper says it is generally agreed that a useful definition:
- clearly identifies the attributes of what is to be defined
- is not obscure
- is not circular
- is scoped appropriately
- is ideally positive rather than negative
The 2017 paper criticises:
- definitions containing long sentences with no punctuation.
- unnecessary definitions: ‘non-UK resident’ means a person who is not resident in the United Kingdom’.
- circular definitions: ‘trade’ includes every trade, manufacture, adventure, or concern in the nature of a trade.
- obscure definitions: ‘Land’ – includes messuages, tenements and hereditaments, houses and buildings of any tenure. Readers will not understand some of the archaic words in this definition.
Other suggestions and comments:
The OTS Definitions paper contains some other suggestions by the OTS itself, or by respondents to an OTS consultation:
- if a definition needs to differ from an existing, common definition, this should be stated explicitly and signposted clearly.
- defined terms should be highlighted in legislation in a consistent manner, perhaps by using bold or underlined text. The formatting should be in a form that works in both paper and online formats, and that works for people with impaired vision.
- definitions should be concise, but clear.
- definitions should stand alone, without cross referring to other definitions.
- definitions should be capable of being used in more than one situation.
- definitions should be written in everyday language.
Types of definition
The Office of the Parliamentary Counsel (OPC) Drafting Guidance on definitions identifies (in paragraph 4.1.1) 2 categories of definitions:
- exhaustive definitions that replace the meaning that the defined term would otherwise have.
- inclusive/exclusive definitions that adapt the meaning that the defined term would otherwise have, by clarifying potential doubt or expanding or limiting the meaning.
Comment on the OPC categories
The OTS report refers to an earlier (2011) version of the OPC Drafting Guidance, which identified 4 categories of definition. Presumably, the OPC intends the new category of exhaustive definitions to cover, among other things, definitions of completely new concepts created by the legislation being drafted. The latest version of the guidance, dated 2020, is available at guidancebook.book (publishing.service.gov.uk)
Other comments by the OPC and OTS
The OPC Drafting Guidance points out that one type of exhaustive definition is a short label created purely as a drafting device to break material up or to make it easier to follow. The OTC report states that such short labels usually apply to a single piece of legislation, or even to a specified part of the legislation (eg a chapter, part or a section).
The OTS report says that some tax definitions are not true definitions, being ‘shorthand’ referring to a specific concept in legislation, rather than giving the meaning of a term.
There are some useful suggestions in the OTS report and in the OPC Drafting Guidance. The suggestions could help anyone writing definitions, particularly in contexts such as tax law, other law or accounting standards.