Finance (No. 3) Bill 2010-11 - Treasury Contents


1  Report


1. Earlier this Session the Committee published a Report on the Principles of Tax Policy.[1] It set out a number of principles by which tax policy-making should be judged.[2] In that Report the Committee concluded there was a need to improve the scrutiny of the Finance Bill.

2. With Parliamentary scrutiny in mind, in our Report on Budget 2011 we announced that we had invited the accountancy professional bodies:

to submit more considered memoranda on the extent to which the provisions of the Finance Bill meet the criteria set out in our recent report: Principles of Tax policy. We expect to publish this material in time for Committee Stage of the Bill. We hope that that this will assist our colleagues in scrutinising the Finance Bill when it comes before the House.[3]

3. The Association of Certified Chartered Accountants (ACCA), the Chartered Institute of Taxation (CIOT) and the Institute of Chartered Accountants of England and Wales (ICAEW) have each responded to our request. They have compared the tax measures with the principles set out in our report. Their responses are appended. We are extremely grateful to the bodies concerned for their efficient response to our request.

4. We hope that this work will assist colleagues in scrutinising the Finance Bill. If this experiment proves useful, we intend to commission and publish written evidence in time for the committee stage of future Finance Bills.


1   Eighth Report from the Treasury Committee, HC 753 Back

2   Tax policy should:

1. be fair. We accept that not all commentators will agree on the detail of what constitutes a fair tax, but a tax system which is considered to be fundamentally unfair will ultimately fail to command consent.

2. support growth and encourage competition.

3. provide certainty. [...] Certainty about tax requires :

i. legal clarity: Tax legislation should be based on statute and subject to proper democratic scrutiny by Parliament.

ii. simplicity: The tax rules should aim to be simple, understandable and clear in their objectives.

iii. targeting: It should be clear to taxpayers whether or not they are liable for particular types of charges to tax. When anti-avoidance legislation is passed, due regard should be had to maintaining the simplicity and certainty of the tax system.

4. provide stability [...]

5. The Committee also considers that it is important that a person's tax liability should be easy to calculate and straightforward and cheap to collect. To this end, tax policy should be practicable. , Ibid, para 84

6. The tax system as a whole must be coherent [...] Back

3   Tenth Report from the Treasury Committee, Budget 2011, HC 897, para 2 Back


 
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Prepared 28 April 2011