The Treasury committee has six principles for tax policy: that it should be fair, support growth and competitiveness, certain (ie, legally clear, targeted and simple), stable, practical, and coherent. In preparation for the committee's evidence session with the Chancellor in the immediate aftermath of each Budget, ICAEW Tax Faculty is asked to submit commentary on the policy announcements in the form of a traffic light assessment, see ICAEWrep 124/18. This year there is a lot of amber as we await further details and consultation.
Only one measure earned a red mark overall, the new Digital Services Tax (DST). The Chancellor has published a consultation setting out his proposal for the UK to impose its own DST in 2020, while restating the government’s commitment to continuing to discuss an international solution.
Extending the off-payrolling rules to the private sector was also highlighted as red by our assessment as needing great caution. We will doubtless be coming back to this in the coming months.
Pending review of the relevant detailed legislation, our initial assessment of how Budget 2018’s new tax policies match up to the principles is set out below.
As noted above, these are our initial assessments of the measures announced in the Autumn Budget. These assessments may change once we have studied the proposed measures in more detail.
Agreed those principles. Suggest repeal present system. Not clear, certainly not simple, not very stable, not practical, and not usually coherent. Look forward to the start of the new system that is principle compliant. But I'm certainly not holding my breath....