Following an article by Anita Monteith from the ICAEW in City AM, our tax partners response was printed in today’s paper.  In it we agree with Anita that today’s changing work patterns will impact the UK tax take and that a simpler system is needed.

 

Re: Forget how we spend it, the UK tax base is under threat (2 October)

 

Anita Monteith’s excellent article highlights the impact that changing working patterns and increased automation will have on tax receipts which in turn could lead to a profound impact on our public services.

Now is the time for radical thinking on the UK tax system.  One area of focus must be on tax simplification.  The long shadow of Brexit negotiations means that subsidies and tax breaks will be difficult to enact, especially if they contravene EU state aid rules.  Instead the Government has the opportunity to make a virtue out of a necessity and choose simplicity over subsidy to support the economy. Simplicity in doing business will give the UK a competitive advantage that does not breach EU rules.  In practice this means aligning National Insurance and Income Tax as well as a moratorium on all new business tax policies that do not simplify the system until 2020 or until the Brexit negotiations are finished (whichever comes first).

The Ten Commandments contain 200 words, the US declaration of independence has 1,300 and the Magna Carta has 4,000 words.  The UK tax code clocks in at 10 million words. Now is the time to cut this back and signal the UK’s global competitiveness by being a simple place to do business.

 

Jo Gilbey is Tax Partner at BDO.

“Now is the time for radical thinking on the UK tax system.”

Jo Gilbey, Tax Partner, BDO

More insights

BDO European survey: the UK perspective


Stuart Lisle discusses three areas of change for UK businesses following results of the BDO European survey

Read More

BDO New Economy

Mid-sized businesses win the race for overseas turnover


Our research reveals that mid-sized businesses grew overseas revenues by 69% over the last five years, significantly outpacing large and small...

Read More

Five Thames Valley businesses looking to technology to boost productivity


We hear from five Thames Valley businesses on how they make the most of technology to boost productivity.

Read More