MPs are launching an inquiry into how the tax system could be reviewed in the aftermath of the coronavirus crisis.
The Treasury select committee announced today (July 17) it would assess the major long-term pressures on the UK tax structure, what the UK could do to protect its tax base and whether there should be tax reform.
It said the reconstruction of the economy after the unprecedented economic fallout caused by the pandemic was an “opportunity” to examine the tax system.
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.
Mel Stride, chairman of the Treasury committee, said: “Tax will play a major role in the years ahead in restoring the public finances and ensuring we have a recovery which is balanced across the UK and fair to all.”
President of the Chartered Institute of Taxation, Glyn Fullelove, said the UK economy faced “enormous challenges” in the aftermath of the pandemic, adding that it was vital the chancellor of the exchequer was able to predict how different measures would deliver for the country.
Rachael Griffin, tax and financial planning expert at Quilter, said there was “no doubt” the chancellor would have to “raid the piggy bank”.
She said: “The committee’s focus on post-pandemic tax reform is a welcome next step as it is important there is adequate consideration of how any potential change can be implemented efficiently, without distorting behaviour and while ensuring fairness to all.”
Chancellor Rishi Sunak will be looking for ways to raise cash in order to balance the books as hundreds of billions of pounds has been spent on keeping businesses and households afloat amid the virus crisis.
This week (July 14) he commissioned a review of capital gains tax in relation to individuals and smaller businesses, asking the Office of Tax Simplification to consider the overall scope of the tax and the rates which apply.
According to chartered accountants firm Moore Kingston Smith, other ways the chancellor could look to increase revenue included a full integration of income tax and national insurance contributions, means tested benefits for the elderly and inheritance tax reform.
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