Give us your details and we’ll be in touch asap

Insights

All Articles

Business Services

Business Tax

Personal tax

Probate and Inheritance Tax

VAT

Budget stuff  •  Business Services  •  Business Tax  •  government  •  Personal tax  •  Pre-Budget Report (PBR)  •  Small Business  •  Taxation

Should tax be a cross party issue?

By RJP LLP on 4 January, 2010

Should tax be a cross party issue?

After reviewing the different tax policies announced in the recent PBR I couldn’t help but reflect upon how politically motivated tax has become. It is a key political issue (not to mention weapon!) and the parties bicker constantly over it. Whatever one says the others disagree with.  Just because. Even if they then do a u-turn and brazenly adopt the other’s potentially good idea!

How fair is that on the tax payers of the UK? The answer is it’s not.   Look at policies introduced throughout history for some shining examples of where politics undermined policymaking – higher rate taxes, abolition of MIRAS and pension tax credits for instance.

There is no doubting that tax legislation is clearly very politically motivated and decisions are not always made with the stability of the country in mind. If we are to reach a point where tax and politics are not so completely tied up in one another, some more drastic measures may need to be considered.

Look at the Bank of England for an example of what could be done. In May 1997, the Government granted the Bank of England operational independence allowing it to set domestic interest rates. (We should remember that the government retains control of the final objective of monetary policy - the Government sets the inflation target within which the Bank must operate when carrying out monetary policy decisions). The general perception though is that the Monetary Policy Committee has worked in a harmonious manner and that their deliberations have been genuinely free from political influence.

The Treasury meanwhile is a department of state and part of the government. It works to the government of the day, whatever the political persuasion and in that sense is not independent and can never be seen to be. Would things not vastly improve if we had a system whereby the Treasury was no longer linked to the government but an independent, non political body with representatives from all the parties working together towards achieving say a target revenue for the government’s purse?

If the Treasury became a cross party institution the very concept of tax could be re-thought.  By taking politics out of the tax system then decisions really would be made for the good of the country as a whole and we would end up with a much fairer system than the one we currently have.

www.rjp.co.uk

Read more articles like this

Was this the dinkiest budget ever? Short in length and even shorter on policy

10 ways #Budget2017 is good news for business owners

Tax policy changes: What to expect in this year’s Summer Finance Bill

Policy u-turns go full circle – 13 tax changes for 2017 are abandoned!

Budget 2017 brings relaxation to substantial shareholding exemption rules  

Share this:

All Articles

Business Services

Business Tax

Personal tax

Probate and Inheritance Tax

VAT

Image

There are many benefits to asking your accountant to handle probate

Did you know RJP LLP are licensed by the ICAEW to offer a full probate service.

This can save you time and money, plus we can advise on matters related to inheritance tax at the same time.