An enquiry has been launched by the House of Commons Treasury Committee. There are concerns over the current impact the Coronavirus pandemic has had on the UK economy and public finances.
With all the Coronavirus support measures introduced alongside other funding to support public services by the government, the debt levels will be significantly higher than before.
It is with no doubt that the tax system will help form a central role to support the recovery of the UK economy in the years to come. The enquiry, which calls for evidence, will be open until Friday 28 August 2020.
The Committee is seeking evidence for the following:
• What are the major long-term pressures on the tax system in the UK, including those arising from changes in working practices, demographics, the environment and other factors? How are these affecting the efficiency of the tax base and the overall level of demand for public services?
• What more can the UK do to protect its tax base from erosion as a result of globalisation and technological change, and what further impacts will the Coronavirus pandemic have on our tax base?
• Do these pressures need to be met with tax reform, and if so, is this the right time for reform?
• What overall level of taxation can the economy bear without undesirable or counterproductive harm to economic growth?
• Which areas of the tax system are most in need of reform, and which are best left alone?
• What reforms should be considered in response to the pressures on the tax system?
• What is the role of tax reliefs in rebuilding the economy and promoting economic growth and efficiency? Does the current regime of tax reliefs perform this role well?
• What are the areas for simplification?
• Is there a role for windfall taxes in the post Coronavirus world?
• What is the right balance between taxation of work, savings/pensions and wealth?
• What is the best way to tackle tax reform, including what changes might be needed at HMRC to support implementation, and how should the Government consult with stakeholders and parliament?
The tax team at CBW work closely with other networks and professional institutes as part of these discussions. There is no doubt that reforms to the tax system will be needed to support the recovery of the UK economy. Changes will undoubtedly need to be evolved perhaps in the same way many businesses and people operate here in the UK and globally prior to the pandemic and perhaps as a result of the pandemic.