Tax Day: The wrong day to reform an already complex tax system
Ahead of ‘Tax Day’ on the 23rd March when the government is expected to announce a number of consultations regarding reforms to various taxes, Patrick King, Partner at MHA MacIntyre Hudson, believes it is a bad time to reform an overly complicated tax system, with both Brexit and the pandemic still far from over:
“I have one plea for Tax Day: the government needs to remember the business community is still reeling from the impacts of both Brexit and the pandemic, which are still far from over. If the Chancellor feels he has to make tax changes, he should focus only on the greatest priority, which is to maintain an attractive tax system so we can compete with the rest of the world now that we have left the EU.
“In theory the consultations about reforms to various taxes expected to be announced tomorrow will improve transparency and allow more time for comment and input from both business and accounting professionals. In practice, we are heading for yet more complexity in an already intricate tax code. Surely a few years of stability and certainty in the tax system is not too much to ask for at this difficult time.
“The volume of tax legislation in the UK has grown exponentially over the last 15 years or so and we now have one of the most complex tax systems in the world. We also need to keep in mind that massive changes are already baked in to our tax system, coming from “making tax digital” due over the next couple of years. The changes announced to corporation tax in the last budget (3 March) are a bold move, but only time will tell whether they will damage our competitiveness.
“The time to take on the digital economy and reassess capital taxes will come, but right now we ought to leave things alone for a while.”