UK’s tax policy ‘not fit for purpose outside EU’

21 Feb 18

The UK’s current tax policy making process is not “fit for purpose” outside the European Union, a think-tank has said.

Common Vision’s Responsible Tax Lab argued that the government should use Brexit as an opportunity for a “culture shift” in tax policy making and “take back control”, in a report launched today.

Caroline Macfarland, director of Common Vision, said: “Brexit provides the impetus for a culture shift: a fresh look at what can be done differently to build the foundations of a more constructive dialogue, so that all citizens can have a shared understanding of what we are trying to achieve with our tax system.”

The report, Responsible tax: New rules for Brexit Britain?, said that as new tax reliefs, incentives and ‘deals’ are made between government and industry sectors within and outside the UK, policymakers must ensure the tax system is based on long-term goals clearly set out to the public.

It also called on the chancellor to commission a comprehensive review of tax reliefs to the UK’s formal exit from the European Union.

The report also highlights the flaws in the current system and how tax measures are subject to consultation, scrutiny and impact assessment.

It calls for a review of government structure and apportionment of responsibilities around tax policy making, the way tax measures are implemented as a joint effort between the Treasury and other government departments, as well as how they are scrutinised by select committees.

Grace Stevens, chief tax officer at Legal & General, said: “It is clear tax policy has a role in developing the economy and society we need.

“But we need to first agree what we are trying to achieve through our tax system, to whom we are responsible and how we can respond to the disruption and changes of the modern world.

“The time is ripe to answer some of these key questions.”

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