The UK's Conservative Party has pledged to simplify the country's tax system and has highlighted the Section 42 sale and leaseback tax break for the UK film industry as an example of over complex legislation.

Shadow Chancellor Oliver Letwin - whose Conservative Party has edged ahead in the opinion polls of the ruling Labour Party according to a survey last week by YouGov - said that the UK's tax handbook was now 7,000 pages long and that it was so complicated that it was having a serious effect on small and medium sized businesses.

Letwin told BBC Radio 4's Today programme: "The Chancellor invented a rather brilliant wheeze - a tax break that was going to favour low budget British film. It was scheduled to cost £40m in lost tax but cost about a billion pounds because its been used by people with large incomes to get back income tax with no interest at all in British films."

The Treasury has already taken action to plug the loophole in the sale and leaseback scheme which saw tax breaks benefiting TV programmes and soap operas.

A spokesman for Oliver Letwin told that the Shadow Chancellor was giving an example of how the Treasury can fall foul of well intentioned schemes.

He added: "Absolutely nothing he said could be taken to mean that he wanted to scrap the provision."