Responding to the House of Commons Treasury Committee’s inquiry into the future of the tax system after coronavirus, the CIOT makes a number of observations with emphasis on the importance of full and open consultation. In a separate response, the Scottish and Welsh Technical Committees consider the interaction between devolved and reserved taxes. The inquiry is due to close on 7 December 2020.
The Treasury Committee invited views on how the UK tax system will need to change to address the challenges of the post-coronavirus economic environment. Key to the review is the extent to which tax reform can (and should) meet these challenges. The CIOT responses highlight the following:
the UK government should address post-Covid challenges head on, setting out a roadmap for the development of tax policy accompanied by open and widespread consultation;
the different tax treatment of individuals depending on their employment status needs to be addressed (either moving towards a level playing field, or reforming the existing distinctions) with increased focus on making compliance easier for self-employed individuals;
the tax system needs to address the taxation of MNEs, particularly through the OECD pillars and also by tackling abuse of intra-group charges for intellectual property;
the use of tax policy to influence behaviours needs to be reconsidered; for example, the UK needs a long-term strategy for environmental taxation;
VAT should be simplified to smooth out the ‘seemingly illogical borderlines and differences in treatment’; and
in relation to devolution, proactive co-operation between the UK and regional governments (including forewarning of planned changes) would improve the policy-making process; the CIOT highlights some of the complexities resulting from partial devolution of income tax.
Responding to the House of Commons Treasury Committee’s inquiry into the future of the tax system after coronavirus, the CIOT makes a number of observations with emphasis on the importance of full and open consultation. In a separate response, the Scottish and Welsh Technical Committees consider the interaction between devolved and reserved taxes. The inquiry is due to close on 7 December 2020.
The Treasury Committee invited views on how the UK tax system will need to change to address the challenges of the post-coronavirus economic environment. Key to the review is the extent to which tax reform can (and should) meet these challenges. The CIOT responses highlight the following:
the UK government should address post-Covid challenges head on, setting out a roadmap for the development of tax policy accompanied by open and widespread consultation;
the different tax treatment of individuals depending on their employment status needs to be addressed (either moving towards a level playing field, or reforming the existing distinctions) with increased focus on making compliance easier for self-employed individuals;
the tax system needs to address the taxation of MNEs, particularly through the OECD pillars and also by tackling abuse of intra-group charges for intellectual property;
the use of tax policy to influence behaviours needs to be reconsidered; for example, the UK needs a long-term strategy for environmental taxation;
VAT should be simplified to smooth out the ‘seemingly illogical borderlines and differences in treatment’; and
in relation to devolution, proactive co-operation between the UK and regional governments (including forewarning of planned changes) would improve the policy-making process; the CIOT highlights some of the complexities resulting from partial devolution of income tax.
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