The Chartered Institute of Taxation has welcomed a report by the Office of Tax Simplification (OTS)1 - written at the Chancellor’s request and published today - that highlights flaws with capital gains tax.
John Cullinane, CIOT’s Tax Policy Director, said:
“Today’s OTS report is a welcome step in exploring how capital gains tax distorts taxpayers’ behaviour, and its recommendations provide a useful framework for the Government to take the issues forward.
“The OTS Report benefits from the extensive consultation that lies behind it and we urge the Government to continue a consultative approach in weighing up the issues it raises, which go beyond simplification, important as that is. There are fundamental issues of fairness between different types of taxpayer, of how to most effectively encourage enterprise, and of what pragmatically raises the most revenue, and these do not all necessarily pull in the same direction. There are also interactions with the taxation of companies and trusts which need to be worked through.
"A diet of piecemeal Budget surprises would be unlikely to lead to a more coherent system or to achieve the best balance between these factors.”2
Notes for editors
1. The OTS Capital Gains Tax Review: Simplifying by design can be found on this link.
2. The CIOT/IFS/IfG Better Budgets report sets out a range of ways in which the coherence of tax change can be improved, including use of road-maps and establishing clear guiding principles and priorities for tax policy early in a Parliament.