Consult before making big changes, CIOT urges new tax minister
The Chartered Institute of Taxation (CIOT) has written to the new tax minister stressing the importance of carrying out wide and early consultation before committing to significant reforms to the tax system.
In a letter to the new Exchequer Secretary, Dan Tomlinson, congratulating him on his appointment, CIOT President Nichola Ross Martin expresses concern about “an absence of a strategic approach by the government to tax policy-making, and a sense that policy-making is generally being carried out Budget to Budget for fiscal reasons without broad consultation or much focus on the overall design of the system”.
The Institute President gives the example of the currently proposed changes to inheritance tax as an area where the Government might have been able to achieve their aims in a less contentious way if they had consulted at an earlier stage.
Looking ahead to the next Budget, Ross Martin notes the speculation around changes to property taxes in particular. She writes: “If this is an area the Government are looking at we strongly encourage you to take a strategic, holistic approach, looking at the interaction of different taxes - and non-tax policies - and the market as well as consulting with stakeholders before policies are set in stone. Wide and early stage consultation is, in our view, key to successful implementation and public acceptance. Unveiling a series of reforms on Budget day which have not been consulted on will make both bad policy and public backlash more likely.”
The CIOT letter also warns about the design of proposals to raise standards in the tax advice market. “While the policy objectives are sound, the speed with which the proposals have moved to draft legislation, with little opportunity for early consultation, have left the scope of the proposal problematically wide and poorly targeted.” They risk creating “significant collateral damage to reputable tax advisers seeking to represent their clients’ best interests”.
A further issue raised in the letter is the proposed mechanism for bringing unused pensions on death within the scope of inheritance tax, which the Institute describes as “impractical” and likely to lead to protracted and costly litigation. Ross Martin points the minister to “alternative, more workable, mechanisms” proposed by the CIOT in the Institute’s consultation response earlier this year.
Other significant issues highlighted in the CIOT letter include continuing challenges in respect of HMRC customer service and the need for an ongoing focus on simplifying the tax system. The Institute also highlights problems caused by the non-alignment of definitions of employment status for employment law and employment tax purposes, and warns of key issues relating to Making Tax Digital for Income Tax that remain unresolved.
Notes for editors
- CIOT’s letter to the new Exchequer Secretary can be read in full here.