Opinion Former Article

CIOT backs report’s recommendations on making tax policy

Commenting on the report, ‘Responsible tax: New rules for Brexit Britain?’, published today (Wednesday 21st February) by the thinktank CoVi, CIOT Tax Policy Director John Cullinane said:

“This report is a welcome contribution to the debate on the future of UK tax policy, and deserves careful consideration by government.

“Ideas in the report for improving the tax policy-making process push in the same direction as recommendations in last year’s Better Budgets report, published by CIOT, the Institute for Fiscal Studies and the Institute for Government. At the heart of both reports is the idea that more coherent and settled strategy, with cross-government and external input, added to effective scrutiny from initial consultation through to post-implementation review, can combine to produce better tax policy and a better public understanding of the tax system.

“The proposal for an industrial strategy tax roadmap is a good one. Enabling businesses to plan ahead with greater certainty about future tax policy should encourage investment and help counteract some of the uncertainty generated by the Brexit process. Having the Treasury and the Business department collaborate on such a roadmap would be beneficial. Too often the two departments carry out their policy thinking in overlapping silos, despite obvious cross-over. The limited remit of the Taylor Review of Modern Employment Practices is a classic example of this.

“The report’s suggestion that select committees, including those not traditionally looking at tax policy, could take on a greater tax scrutiny role, also has a lot of potential. From the environment to pensions to the creative industries there are many areas of policy where tax has a central role but the Treasury and HMRC are not the lead departments. Thinking about spending-like tax reliefs alongside grants, subsidies and other measures administered by spending departments would be an aid to judging the most effective way to achieve the policy outcomes being sought by government, which might be tax, spending, regulation or some combination of these.

“The idea that the Chancellor should commission a comprehensive review of tax reliefs prior to the UK’s exit from the European Union has merit though the timescale looks extremely ambitious, given the pressure the Brexit process is already placing on civil service resources. If, as suggested, the Office of Tax Simplification was asked to do this it would surely need significant additional resources to deliver a fully comprehensive review to the timetable suggested.

“Successive governments deserve credit for limited improvements to the tax policy process but these have not prevented the tax system from reaching unsustainable levels of complexity and leave a need for serious improvement. Hopefully the space created by moving to a single fiscal event (as advocated in Better Budgets), combined with a Chancellor who, whether through inclination or circumstances, seems less inclined than most of his predecessors to keep the tax system in a state of permanent revolution, will enable recommendations such as those in this report and Better Budgets to get the consideration they deserve from ministers and officials.”

Notes for editors

1.       Better Budgets was published by the CIOT, Institute for Fiscal Studies and Institute for Government in January 2017. Click here for further information or to read the report.

2.       Today’s CoVi report can be found on its website here.

3.       The Chartered Institute of Taxation (CIOT)

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.

The CIOT’s 18,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.uk (Out of hours contact: George Crozier, 07740 477 374)

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