Ahead of the Kings Speech and local elections next month, ICAEW asked its members what policies they wanted the UK government to focus on.

More than 430 members responded, with 90% agreeing that legislation to simplify the tax system should be a priority.

“Our members have told us overwhelmingly that they want the government to commit to legislation to simplify the tax system, which is recognised to be one of the most complicated in the world,” said Alan Vallance, ICAEW Chief Executive.

“A simpler tax system would mean fewer disputes about whether marshmallows are food or confectionery, would reduce the personal tax cliff edges that reduce productivity and would make it easier for companies to have clarity on employment status.

“We also need to futureproof the tax base in the face of technological change. Robots don’t pay income tax, so how will the Treasury safeguard revenue as AI transforms the economy?”

Vallance warned that involvement in complicated tax disputes took time and resources that organisations could be using to focus on growth.

He said: “ICAEW members tell us that doing business is too complicated, too expensive, and too uncertain, and we hope the government will commit to tax simplification to drive economic growth and boost business confidence.”

ICAEW supporting better tax system

ICAEW has consistently called for the government to commit to a tax simplification roadmap and strategy, and outlined various ways in which the tax system could benefit from simplification, including:

• moving over time to a single rate of VAT, removing disputes about whether items are standard-rated, zero-rated or exempt;
• measures to streamline employment status; and
• removal of cliff edges at different tax thresholds.

ICAEW’s Tax Faculty has explored the challenges and opportunities offered in reimagining VAT, and has recently launched a major programme of work to diagnose what is wrong with the UK’s tax system and outline what good looks like.

As part of this work the faculty has revised its Ten Tenets for a Better Tax System, which confirm that tax systems should be simple and certain.

Government should also focus on AI and skills

Alongside supporting changes to the tax system, the majority of ICAEW members polled agreed that the government must also be prioritising artificial intelligence (AI) and enabling access to skilled workers.

Close to three-quarters of members polled said the government needs to focus on providing regulatory clarity on AI. Meanwhile, 54% agreed with the government updating its skills framework to increase workforce participation.