I wrote about tax reform for this morning's Sun (p.4). Below is the full version of the comment piece. It references tax reforms that were explored in the Single Income Tax, which was the final report of the 2020 Tax Commission.
Many readers will have their own stories about dealing with the taxman. Whether it’s a waiting on hold on the phone for hours, trying to fill out an infuriatingly complicated form or receiving one of the dreaded demands for money back, taxpayers are often left feeling short-changed.
So when they see that a global giant like Google gets the opportunity to sit down and negotiate a deal with HMRC, it’s little wonder that ordinary taxpayers and small businesses see red.
But, yet again, we know that Google hasn’t broken any laws. We keep hearing about these stories but the cycle is repeated – public anger, tough talk from politicians, a debate about tax policy, no reforms enacted.
There two things we must do to restore the public’s trust in the tax system.
One is to reform our own system here in the UK. Taxes are too high, too complicated and too unpredictable. Individuals and small businesses have to fill in mountains of paperwork to comply with HMRC. Big companies can simply pay accountants and lawyers to do it all for them, and find a few loopholes at the same time. So we need to simplify the system, with low, competitive rates to encourage businesses to base themselves here, contributing to UK growth and creating jobs.
Two is lead the fight to abolish Corporation Tax. It was introduced in the 1960s but the world has quickly moved on; businesses are international and capital is much more mobile. The interaction between national tax systems has failed to keep pace and companies that are based abroad but operate here are not liable for the big tax bills that people expect them to be. A replacement single tax on capital income with no loopholes would be much easier to administer and harder to avoid.