In 2010 the former Chancellor, George Osborne, called the tax system a ‘spaghetti bowl’. He was spot on: the UK tax system is hideously complicated, with far too many reliefs and exemptions meaning the Tolley’s tax guides now run to nearly 22,000 pages.
Our Chief Executive, John O'Connell, was pleased to be part of the 2020 Tax Commission as it undertook a thorough review of the system, to come up with recommendations for reform to make it simpler. After 18 months of research, evidence sessions and much heated debate the Commission produced its final report, The Single Income Tax, in 2012.
The plan called for replacing corporation tax and capital gains tax with a tax on distributed income. It also proposed decentralising tax raising powers to local authorities, while scrapping stamp duty and inheritance tax. The system we recommended is intended to capture flows of income and tax them only once, at the same rate.
With that in mind, John is pleased that the TaxPayers' Alliance is publishing this crucial report by Dominic Raab MP. He has outlined in this paper how our current system is badly skewed against the little guy – and recommends a series of robust measures to make taxes simpler and less punitive.
Dominic deals with new legislation such as the requirement for companies to provide tax updates on a quarterly basis, and argues forcefully that HMRC should compensate taxpayers when they overstep the mark.
He also proposes a more practical role for the Office of Tax Simplification – after all, George Osborne formed the organisation to untangle the spaghetti in the bowl, so they should be given a more formal role to do exactly that.