The recent deluge of headlines about Google’s tax settlement with HMRC has once more demonstrated public anger with the tax system. The consensus that substantial reform of Corporation Tax is required has never been greater.
The Treasury Select Committee has realised his and opened an inquiry titled “UK tax policy and the tax base”. One of the questions being asked is “should the Government consider other forms of taxation (such as the proposals of the 2020 Tax Commission) when considering how to raise tax in the future, particularly from businesses and wealthy individuals?”
Amongst the conclusions of the 2020 Tax Commission, a joint project between the TaxPayers’ Alliance and the Institute of Directors, was the replacement of Corporation Tax with a tax on income distributed from capital. This briefing note explains the problems with the current system, the proposals of the 2020 Tax Commission and the problems with the other reforms being proposed.