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ICAEW works to support tax reform

As part of its strategy to support a world of stronger economies, ICAEW draws on its members’ expertise to examine hot topics in tax and provide practical solutions to challenges faced by policymakers and regulators. Here you can find our latest publications supporting tax reforms.

Taxes are at the heart of a functioning society. They generate the revenue needed to provide public services and infrastructure. However, questions of whether high-net-worth individuals and global corporates are paying their fair share of tax are increasingly dealt with in an emotive way in the mainstream press.

At the same time, technology is profoundly affecting the administration of tax systems, as well as bringing unprecedented challenges to the tax base. The gig economy, for example, provides innovative ways of receiving payment for work that are not yet adequately captured by tax authorities.

A world of strong economies is not possible without fair and sustainable tax systems and it is crucial the accountancy profession has a strong voice on how tax regimes are reformed. ICAEW’s Tax Faculty has been providing that voice since 1991 and you can read its latest conclusions below.

Tax and technology

Technology is revolutionising the economy and the nature of work. It is challenging the basis on which tax is assessed and threatens to erode the tax base. It is also changing how tax authorities interact with tax payers, the data they collect and how they analyse it. Crucial questions for tax authorities, include:

Are business property taxes sustainable in an online world?

Property taxes are becoming increasingly unpopular as online business models have led to criticism that some businesses are being unfairly taxed. Property tax can also be extremely complex, difficult to understand and costly to navigate.

The UK has the highest property taxes in the OECD, but firms in property intensive sectors argue that the business rates system is inefficient and unfair. Business rates have provided government with a consistent, reliable and increasingly significant source of revenue. But is this sustainable?

How do we tax work?

The rise of the gig economy is one example of the changing nature of work. But as the number of self-employed contractors rise, we’ll see a decline in employment taxes. The gap between self-employed versus employed tax has to be addressed.

ICAEW research considers how the UK's national insurance system might be reformed. We ask whether we can more closely align income tax and NIC, and explain why this is important:

How do you tax a robot?

If work is being done by robots rather than people, should we be taxing them too? The principle sounds compelling, but the reality is more complex. For a start; defining a robot is far from straightforward. Although it would be possible to tax the use of certain technologies, would it be desirable?

How is tax being digitalised?

Technology is being harnessed by tax administrations around the world to reduce costs and improve compliance and tax yields. The specific objectives and aspirations for digitalising tax administration vary between countries and some states are much further ahead than others. ICAEW has examined case studies from seven countries and compared their experiences:

Tax and ethics

There has been intense public debate around the fairness of corporate tax,  particularly criticism has been made of the level and location of taxes paid by multinational and online businesses. These concerns are having a profound effect on tax policy both nationally and internationally.

Business are faced with a dilemma of whether to respond efficiently to tax incentives, while governments need to consider how to maintain public confidence when pursing policy objectives through such incentives:

Tax and Brexit

In the uncertainty surrounding Brexit, VAT and customs duties are particular issues for businesses importing and exporting between the UK and the EU. ICAEW guidance includes:

Tax and public sector finances

With an erosion of tax bases, the challenge of how to assure revenues for public finance is high on the agenda. Hypothecation, as this ring-fencing of certain taxes is referred to, is frequently suggested as a solution to a range of public policy conundrums. But is hypothecation a good thing?

ICAEW’s Better Government Series provides policy insights, toolkits and best practice reports on public sector financial management issues.

Ten Tenets for a Better Tax System

ICAEW’s Tax Tenets are 10 simple principles that can be applied by tax authorities to improve how they legislate for and administer tax. The tenets are at the heart of our work in scrutinising tax legislation and in responding to proposed changes to policy and regulation.