The Institute’s tax faculty has come up with two suggestions for the annual Budget, as part of its campaign for tax reform based on the ten tenets of its ‘Tax Manifesto’.
The first of these would mean splitting the Finance Bill into two, with matters relating to tax rates, allowances and reliefs subject to an annual revenue-raising Bill. These would be supplemented by Technical Bills to be introduced when reform is needed of individual areas of the tax system.
This suggestion allows for Technical Finance Bills to undergo parliamentary scrutiny, and a ‘fast-track procedure’ ensuring broad cross-party support and quick implementation.
The second, more radical proposal, would see the Budget and Finance Bill done away with entirely, to be replaced by tax changes made when it is ‘economically prudent’ and following ‘extensive consultation’.
Both suggestions emphasise consultation and correct timing before implementing fiscal changes, and the ICAEW has argued that an ‘all-in-one’ change in March, with little or no consultation, only resuledt in ‘slapdash legislation’.
Commenting on the proposals, Francesca Lagerberg, senior technical manager of the Institute’s tax faculty, said the time had come to replace the ‘self-congratulatory Budget tradition’ with sensibly planned tax law.
‘Alternative approaches need to be considered to improve democratic scrutiny of proposed tax changes and ensure full and meaningful consultation takes place,’ Lagerberg added.
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