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Wanted: clear tax policymaking

Author: Chris Sanger

Published: 06 Dec 2022

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Chris Sanger advocates a rethink on policymaking, with a clear process delivered within a structured framework.

More than a decade ago, the UK’s coalition government produced a paper entitled Tax Policy Making – a new approach, which was intended to set out a new era in tax policymaking, one in which policy was “predictable, stable and simple”. However, since then we have seen many policies developed and introduced outside this framework. This includes the extreme recent example of one chancellor introducing new ‘disruptor’ policies only for them to be reversed by his replacement weeks later. This article argues that now is the time to reset the policymaking process and establish an updated ‘new approach’ that can once again provide confidence to investors that the UK is a predictable and investable environment.

It’s clear that the 2010 approach had a lot going for it: it set out a clear set of stages for consulting on draft policies, provided a constraint on the announcement of policies outside the key fiscal events and announced the creation of the Office of Tax Simplification (OTS). It was followed by the consolidation of tax announcements into an annual budget cycle.

The five stages of consultation

However, these aims were rarely achieved. Looking first at the five stages of policymaking (setting out objectives; determining the best option; drafting legislation; implementing; and evaluating), there are some recent examples of good practice, such as the extensive consultation into the online sales tax. But the reports of the Tax Professionals Forum are littered with examples of policies starting their consultation at either stage two or stage three. Starting at that point removes the opportunity for taxpayers to feed into the policymaking process.

There are, of course, times when policy changes are so urgent that the usual process is too slow. However, these should be the exception. In responding to the Tax Professionals Forum, the government (at the time) argued that other ‘equally substantive’ ways of consulting were being adopted. While this may be true, it appears more than coincidental that many of the policies developed in this way are the ones that continue to raise concerns today. The old adage of ‘act in haste, repent at leisure’ seems very apt.

Rather than accepting that these exceptions are likely to be common, now would be a good time to revisit the policy stages and set out an alternative approach (and the criteria for qualifying for the approach) to be followed in such exceptional cases. At the height of the pandemic, non-tax policy development demonstrated that it is possible to consult with a large number of people in a very short time. Such success should embolden the Treasury to look to adopt such approaches when the standard consultation framework is not possible.

Now would also be a good time to reinforce the last stage: evaluation. Policies rarely experience a public review, but recent activity by government and the Treasury Select Committee to review the range of tax reliefs, together with the work of the OTS, has demonstrated renewed interest in this area. This should be reinforced in the framework.

A tax role for the Economic Statement

To much fanfare, Philip Hammond announced that his Budget of 8 March 2017 would be the last Spring Budget, going on to say that he would move the Budget to the autumn and also restrict the Spring Statement to being ‘merely’ an economic update. In the event, this has rarely been the case, with two Spring Budgets since then and numerous announcements outside of the Autumn Budget. 

Even though having two fiscal events might have encouraged chancellors to tweak the tax system more than necessary, experience shows that an annual cycle is unlikely to work in practice. Rather than treating chancellors as addicts of tax meddling, we should rely on their professionalism to resist the temptation to tinker and instead to deliver only the changes that are needed at the time.

In the event, despite aspirations to the contrary, we have seen the Spring/Autumn Statement take on the role of the Pre-Budget report, providing an update on the tax policies, either at the same time or a few weeks later in the guise of a ‘Tax Day’. This undermines the original intention of the reform, while losing the clarity of the previous system.

Rather than maintain this fiction, let’s simplify the process and improve predictability by including the tax update in the Statement. This would then provide a natural cadence for the development of tax policies, with the Budget providing stage one (setting the objectives), the Statement providing stage two (determining the best option) and Legislation Day (or ‘L Day’) providing stage three. 


One of the few surviving items from the Kwasi Kwarteng budget is the announcement of the abolition of the OTS. While the Treasury’s new appetite to “embed tax simplification into the heart of government” is to be welcomed, it seems unlikely that the (then) chancellor’s direction to “every one of my tax officials to focus on simplifying our tax code” is going to succeed without further support. After all, that was the situation before the OTS was created and led to its creation in the first place.

The OTS’s role has developed from that envisaged in the 2010 approach and its consultations have rightly looked at how policy choices introduce complexity. I would argue that the role of a policymaker is to design a regime that is no more complex than necessary to achieve the policy aims. As such, the OTS has a valuable role to play in showing that the policy aims themselves can be the driver of the complexity and to challenge whether those aims justify the outcome. That is a different role to what the previous chancellor was advocating in his ‘mini-Budget’ speech.

This is important to consider not just in the context of the OTS, but from a framework perspective more generally. As consultation proceeds, more information is gathered by government and the policy approach crystalises. However, in some cases, the policy or legislative approach becomes embedded and the new information merely triggers changes building on to the existing approach. If we are to truly deliver a ‘no more complex than necessary’ approach, there needs to be willingness to avoid letting ‘sunk costs’ stop rethinking. Although there are some examples where the approach to implementation was changed upon receipt of new information, there are many more examples of complex fixes being added at the last minute. Policymakers should be willing and able to acknowledge that the implementation approach needs to be changed, even if this delays the delivery of the policy. Such a ‘bold move’ will bring benefits of clarity, simplicity and certainty.


So, as TAXline moves into the digital era and leaves the print era behind, I find myself advocating for a step back to the past – a clear policymaking process, delivered within a structured framework, with contingency plans for the unexpected. We should be returning to a formal policymaking process, with policy updates twice a year and a range of consultations in between.

Combine this with the existing annual legislative process, reinforce the scrutiny over the complexity of policy solutions, and publish the workflow for each policy as it goes through the five stages of policymaking. If we have to lose the OTS (which I suggest we don’t) then we need to find some other way to reinforce the evaluative stage of policymaking. 

Such transparency in approach would build back confidence in policymaking and bring benefits to all. This should be formalised in a new ‘New Approach’ and published at a Budget … or indeed at a tax-including Economic Statement. 

About the author

Chris Sanger, UK Tax Policy Leader, EY, Chair of the Tax Faculty’s Technical and Oversight Committee, and founding chair of ICAEW’s Tax Policy Committee