ANNUAL BUDGETS cause short-termism from the government – instead they should take place at a minimum of every three years, according to ICAS.
Stability and certainty would arise from a longer-term budgeting process, it argues.
“A longer-term approach would encourage governments to set a clear strategy for the taxation system and avoid the political temptation of an eye-catching announcement every year”, said Derek Allen, director of tax at ICAS.
“If there is only one Budget every few years, changes to the taxation system outside that process may also attract a better level of scrutiny from MPs. At present, it is not realistic to expect many MPs to look in detail at 600-plus pages of legislation.”
The institute cites the U-turns taken by the chancellor on a number of issues announced in this March’s budget, including the ‘pasty tax’, static caravan VAT charge, the exemption of charitable donations from the £50,000 tax relief cap, as well as the fuel duty increase freeze.
“The UK tax law is too complex and lacks stability. If government is serious about promoting a stable tax regime, then annual change to the UK’s fiscal arrangements should be avoided unless it is vital for economic growth,” added Allen.
Companies reported increased levels of scrutiny over their tax planning strategies last year as fewer FDs understand what HMRC considers as tax avoidance, according to HMRC’s latest large business survey
Tax evaders are set to face tough new sanctions under plans detailed by HM Revenue and Customs (HMRC) today
HMRC has outlined a change in VAT policy to the treatment of dwellings that have been formed from either the construction of new buildings, or from the conversion of non-residential buildings
Let us hope that valuable asset protection vehicles are not made prohibitively burdensome or abolished in the desire to “simplify” IHT