The Chartered Institute of Taxation (CIOT) has warmly welcomed a series of improvements in the tax policy making process announced by the Government today.
These improvements, set out in the Government’s response to a consultation in this area earlier in the year, include a number of improvements the CIOT has been calling for, including a longer period for consultation on tax changes, consultation on the detail of anti-avoidance measures and publication of more legislation in draft.1
Vincent Oratore, CIOT President, commented:
“We welcome the new Government’s commitment to meaningful consultation on tax issues. This is further evidence of the willingness of the administration to listen to the concerns and suggestions of the tax profession and work with us to produce a more efficient tax system.
“For many years, the CIOT has argued that a proper consultative approach is needed in the UK to the way tax legislation is developed and enacted. That means consultation in stages, over a proper timescale, to allow taxpayers and advisers proper opportunity to input views, analysis and experience. The objective is simple: to develop workable tax law that imposes as few administrative burdens as possible.
“There are some omissions in the Government’s proposals. In particular, we would like to see the Government giving a clearer steer on parliamentary scrutiny of tax legislation. However, we look forward to the Treasury Committee’s consideration of possible reforms and are keen to engage with them, in particular in support of our proposal for a parliamentary Joint Committee on Taxation.
“Overall, the changes announced by the Government, added to those already made, represent a significant step forward and one that the CIOT warmly welcomes.”
Commenting specifically on the Government’s ‘Draft Protocol on Announcements Outside Scheduled Fiscal Events’, Vincent Oratore said:
“Retrospective change in the tax arena is potentially unfair and damaging to confidence in a tax system. Our recent discussion paper2 on this area called for protocols to be developed over the way retrospection and retroaction can be used. Accordingly, we naturally welcome the fact that the Government are looking at the area of retrospective legislation and attempting to provide some clarity as to the circumstances when they will use it. However, the draft protocol stops short of adopting a general principle of opposition to retrospective changes in the tax rules, which we would like to see. ”
Notes to Editors
- Other improvements the CIOT has called for which are included in the Government’s paper published today include:
- Consultation at the stage of a tax policy change when the overall principle and objectives are being considered
- Increased predictability in tax policy through greater use of ‘road maps’ (such as the Corporate Tax Road Map)
- Setting of Budget dates well in advance, and earlier notice of publication of legislation and other tax announcements
- Provision of feedback following consultation exercises which makes clear what changes have been made as a result
- Introduction of a specific Tax Impact Assessment in place of the current government-wide Impact Assessment
NB. The Government’s proposal to consult on anti-avoidance measures is subject to the proviso that it will be done “provided this does not present additional risk to the Exchequer”.
- The CIOT’s paper on retrospective taxation can be viewed online at:
http://www.tax.org.uk/Resources/CIOT/Documents/2010/11/Retrospective%20taxation%20and%20tax%20policy%20making%20CIOT%20Nov10.pdf
