Chancellor urged to reform tax policymaking

A trio of influential organisations has urged the Chancellor to implement a series of reforms to the tax policymaking process.

The Chartered Institute of Taxation (CIOT), Institute for Fiscal Studies (IFS) and The Institute for Government (IfG) jointly called on the Chancellor to make five key changes to the process:

  • Publicly state the guiding principles which underpin the government’s approach to tax policy;
  • extend the 2010 corporate tax roadmap to other areas of taxation to help businesses and individuals plan for the future and make long-term decisions;
  • begin consultations on tax changes earlier;
  • commission external reviews of broad areas of tax policy; and
  • abolish autumn statements to minimise the number of new tax measures introduced each year.

The letter said: “There is a significant resource challenge for HMRC, financial institutions and taxpayers to digest the volume of technical tax change that has characterised recent years and to which Brexit seems likely to add. We believe that by reducing uncertainty and ‘surprises’ the changes we propose will reduce burdens and bring benefits to all those involved.”

The letter was prompted by the initial findings of a joint project carried out by the IFS, IfG and CIOT to examine how budgets and tax could be improved.

IFS Director, Paul Johnson, said: “Nearly £4 in every £10 earned in the economy is taken in tax. How the tax system works matters enormously to us all. The current system for tax policymaking is not fit for purpose. Too many changes are sprung on the country in too many fiscal events with too little sense of direction, consultation or evaluation.”

The Financial Times has subsequently reported that the Chancellor has said to colleagues that he wants the autumn statement to return to its original purpose of fiscal forecasting and that he wants to move away from micromanagement and “gimmicks”.

Link: IFS – It’s time to talk about tax, experts tell Hammond

For more information about Carroll & Co. Accountants in Sutton Coldfield, please contact us.