• Former Treasury Minister Mark Hoban to chair independent commission
• Chartered accountants warn UK tax system becoming unfit for purpose
• Fully-funded review timed to inform 2029 General Election

The Institute will announce the launch of the Future of Tax Commission at its Annual Conference in London today (Friday 16 October), with a message that the structure of the UK tax system is not fit for purpose.

The commission has been established following long-standing concerns from business and consumer groups about the complexity of the tax system, the disincentives this creates, and its adverse impacts on the economy and economic growth.

Mark Hoban, who was Financial Secretary to the Treasury under David Cameron, will lead a team of commissioners to take a system-wide view of UK taxation. The two-year initiative, which is being funded by ICAEW, but will sit independently, will report its findings before the next General Election, expected to take place in 2029.

Alan Vallance, Chief Executive of ICAEW, said: “Britain’s distorted and complex tax system will soon become unfit for purpose without radical reform.

“As chartered accountants, we see the damage every day. Successive governments over many decades have made tweaks and ad hoc changes to the tax system. This has resulted in the UK not only having the longest and most complex tax code in the world, but the system being riddled with cliff edges and disincentives that hinder productivity, add unnecessary costs and red tape, and ultimately leave the country worse off.

“That’s why we are launching the Future of Tax Commission. It will carry out a root-and-branch review and set out the direction needed to create a modern tax system fit for the 2030s and beyond.

“The world is changing fast. AI, automation, an ageing population and the transition to net zero are reshaping how we work, invest and earn. Our tax system must keep pace to fund vital public services while supporting the businesses and investment that drive growth.”

Mark Hoban, Chair of the Future of Tax Commission, said:

“I am delighted to chair this new Commission. Decades of piecemeal change have left Britain with a tax system that is too complex, too costly and a barrier to growth. We will examine the system as a whole and identify what is needed to make it work better for businesses, taxpayers and the wider economy.

“We will follow the evidence, confront the trade-offs, and produce a practical roadmap for a simpler, fairer tax system. I look forward to getting started.”

The case for a new tax blueprint

More than 15 years after the Mirrlees Review argued that tax should be designed as a system rather than a collection of disconnected measures, ICAEW said changes to technology, demographics, the economy and public finances have strengthened the case for a fresh examination.

At more than 23,000 pages, the UK tax code is not just the longest and most complex in the world, ICAEW analysis found, but it has doubled in 20 years. There are over 1,000 tax reliefs available across the system. ICAEW members have consistently cited tax simplification as an area for reform, including in the run-up to next month’s Budget when 56% of those surveyed said simplifying the tax and regulatory system was their top priority.

As AI and automation transform how people work and where value is generated, and the population ages, the tax base on which the UK has traditionally relied will come under increasing pressure. ICAEW said that significant disruption to existing jobs arising from AI and automation could have a major impact on tax receipts, particularly if productivity improvements and any new jobs that emerge don’t generate enough to make up the difference.

Meanwhile, decades of incremental changes have created increasingly complex interactions between taxes, thresholds and reliefs, with consequences for employment, investment and business growth. For example, some small firms deliberately limit their turnover to remain below the VAT registration threshold, avoiding tax and administrative costs at the cost of restricting growth.

The Future of Tax Commission will begin substantive work in January 2027. Its first phase will assess the system as a whole, agree its priorities and establish an evidence programme. It will then publish a series of thematic reports through 2027 and 2028, before producing an integrated final report and roadmap for reform in the first quarter of 2029.

ENDS

Notes to editors: