Tories warned of dangers of flat tax

Tories warned of dangers of flat tax

Flat tax may not be the way forward says right-leaning think-tank

A right-leaning think-tank has warned the Conservatives that a flat tax may
not be the best way of lowering and simplifying the tax system.

In a report released today, the Centre for Policy Studies said that ‘an
attractive panacea – such as the flat tax – will not in itself solve the problem
of complexity.’

It also warned that a sudden and sharp reduction in tax rates could cause
‘immediate and potentially huge shortfalls that could destroy confidence in the
economy’.

The Tory party announced last week that a commission would be established to
examine the implications of flat tax, which has been adopted across much of
eastern Europe.

The report said there was a strong case for simplifying the number of tax
rates, and proposed moving to two rates for individuals and one or two rates for
companies.

The FT reported that one possibility could involve introducing a 20%
basis rate and a 40 per cent higher rate for individuals – as well as a 20% rate
for companies. Over time, the higher tax rate could be reduced and the level of
personal allowances increased, it said.

The report called for the appointment of a Treasury minister responsible for
simplifying and rationalising tax law.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource