A PRINCIPLE to avoid retrospective changes in tax legislation should be adopted by the government.
The use of retrospective tax changes damages confidence in the UK tax system and harms the UK economy, according to the CIoT in its discussion paper.
“In an internationally competitive world, frequent retrospection would reduce the attractiveness of the UK to potential inbound investors,” said CIoT president Vincent Oratore.
“In recent years we have seen increasing use of retrospective action in the tax system. Thankfully this is still relatively rare but we think it is important for the government to state clearly when, if at all, it will see retrospective action as valid.”
The discussion paper can be accessed here.
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