The Treasury Committee is launching a new inquiry called ‘Tax
after coronavirus’.
The reconstruction of the economy after the unprecedented
economic fallout of the coronavirus crisis is an opportunity for
the Committee to examine the tax system.
The Committee will look at what the major long-term pressures on
the UK tax system are, what more the UK can do to protect its tax
base from globalisation and technological change, and whether
such pressures should be met with tax reform.
The Committee will also seek evidence on what overall level of
taxation the economy can bear, the role of tax reliefs in
rebuilding the economy, and whether there is a role for windfall
taxes in the post-coronavirus world.
The Chartered Institute of Taxation (CIOT) is hosting a virtual
launch event for the inquiry tomorrow, Friday 17 July. Details of
how to register, watch and take part in the event are below.
Commenting on the launch of the inquiry, , Chair of the Treasury Committee, said:
“The UK economy, like many economies around the world, has been
placed under extraordinary stress due to coronavirus, with the
worst of the economic fallout perhaps yet to come.
“Tax will play a major role in the years ahead in restoring the
public finances and ensuring that we have a recovery which is
balanced across the UK and fair to all.”
“So the Treasury Committee has launched this inquiry to examine
how the Government should approach taxation after the
coronavirus.”
Also commenting on the launch of the inquiry, Glyn Fullelove,
President of CIOT, said:
“The UK economy faces enormous challenges in the aftermath of the
Covid-19 pandemic.
“Whatever policies are adopted to meet the challenges ahead,
being able to predict what the UK tax system will deliver under
any given set of measures is vital for the Chancellor of the
Exchequer. Exploring whether this is possible is a vital task.
“I am delighted the Treasury Committee has launched this inquiry
into the weaknesses – and strengths – of the system as it
stands.”
--Ends--
Notes to Editors
CIOT is hosting a virtual launch event for the Committee’s new
inquiry on Friday 17 July at 11am-midday. Mr Stride, Mr
Fullelove, , a member of the Treasury Committee, and others will
speak about the new inquiry, and attendees will have the
opportunities to put their questions to the panel. If you would
like to attend, please register on the CIOT website here.
The inquiry webpage, where evidence can be submitted, will be on
the Committee website here when the embargo is lifted. The
deadline to submit evidence is 5pm on Friday 28 August 2020.
The full terms of reference for the inquiry are as follows:
Terms of Reference
The coronavirus pandemic has had a major effect on the UK economy
and public finances, and when the economy recovers from the
crisis, debt levels will be significantly higher than they were
before. The UK will need a strong tax base to maintain the level
of public services at sustainable rates of borrowing. The crisis
has also brought to the fore issues such as whether the
Government’s economic response to the pandemic should be
reflected in changes to taxation.
The UK tax system has been largely unchanged for many years,
whereas the 1960s, 1970s and 1980s saw a number of radical and
far reaching reforms. But even before the crisis there were a
number of pressures building up in the tax system which had
already led to calls for reform. For example, demographic shifts
are changing the tax base and demands for public services, and
the growth of online- and data-driven employment and business
models are eroding traditional sources of taxation and raising
questions about the future of the tax system. The reconstruction
of the economy after the unprecedented economic fallout of the
coronavirus pandemic is an opportunity to reflect upon and
address these issues.
The Committee is seeking evidence on:
o What are the major long-term pressures on the tax system in the
UK, including those arising from changes in working practices,
demographics, the environment and other factors? How are these
affecting the efficiency of the tax base and the overall level of
demand for public services?
o What more can the UK do to protect its tax base from erosion as
a result of globalisation and technological change, and what
further impacts will the coronavirus pandemic have on our tax
base?
o Do these pressures need to be met with tax reform, and if so,
is this the right time for reform?
o What overall level of taxation can the economy bear without
undesirable or counterproductive harm to economic growth?
o Which areas of the tax system are most in need of reform, and
which are best left alone?
o What reforms should be considered in response to the pressures
on the tax system?
o What is the role of tax reliefs in rebuilding the economy and
promoting economic growth and efficiency? Does the current regime
of tax reliefs perform this role well?
o What are the areas for simplification?
o Is there a role for windfall taxes in the post coronavirus
world?
o What is the right balance between taxation of work,
savings/pensions and wealth?
o What is the best way to tackle tax reform, including what
changes might be needed at HMRC to support implementation, and
how should the Government consult with stakeholders and
parliament?
