ICAEW has published revised tenets for a better tax system – the first update in 26 years – to sit alongside a new framework of institutional pillars. Ed Saltmarsh walks through what has changed, what has stayed the same, and why the revisions matter.
In October 1999, ICAEW published its ten tenets for a better tax system – the principles against which all UK tax legislation should be judged, and against which the system should be held to account when it fell short. The tenets have informed ICAEW’s tax policy work ever since, providing a consistent framework for evaluating and responding to government proposals.
26 years is a long time. The tax system the tenets were designed to assess has changed almost beyond recognition – and in some respects has become considerably worse. It was time for a careful review: not to abandon the framework, but to update it, sharpen it where it had become imprecise, and ensure it speaks to the challenges facing taxpayers and advisers today.
The revised tenets are one part of a wider programme of work that ICAEW is launching to address the state of the UK tax system. A companion article introduces a framework of five institutional pillars: the structural foundations the system depends on, and which must be strong enough for the tenets to be anything more than aspirations.
The revised tenets
The tax system should be:- Statutory. Tax legislation should be enacted by statute and subject to proper democratic scrutiny by Parliament. A clear statutory basis ensures legitimacy, accountability, and public trust in the tax system.
- Certain. As far as possible, the application of tax rules and compliance processes should be certain. Taxpayers should not normally need to resort to the courts to understand how the rules apply to their affairs.
- Simple. The tax system should be easy to understand for all taxpayers and advisers. Complexity undermines trust, creates unfairness, and discourages compliance.
- Easy to administer. Tax liabilities should be straightforward to administer for HMRC, agents, and all taxpayers. Taxes should be designed to work effectively in a digital environment, while administration must remain accessible to those with limited digital capability.
- Properly targeted. Anti-avoidance rules and other targeted measures should be proportionate, clearly defined, and carefully scoped to achieve their policy objective without undermining simplicity or certainty. Poorly targeted measures add complexity and uncertainty, harming compliance.
- Stable. Changes to the tax system should only be made when clearly justified by economic, social, or environmental goals. Transparent, purposeful reforms build confidence and move the system toward greater coherence and long-term stability.
- Subject to proper consultation. Other than in exceptional circumstances, tax changes should be subject to open and meaningful consultation. Adequate time for stakeholder input improves policy quality, practicality, and public trust.
- Regularly reviewed. Tax rules, reliefs, and policy-driven interventions should be subject to regular, transparent review to assess whether they remain relevant, effective, and aligned with current policy goals. Outdated or unjustified provisions should be reformed or repealed to maintain coherence.
- Fair and accessible. The tax system should be fair and accessible in design and in operation, ensuring equitable treatment of taxpayers. Revenue authorities must exercise their powers proportionately, and all taxpayers should have timely access to HMRC assistance, independent appeal, and redress.
- Efficient. The tax system should raise revenue in a way that minimises unnecessary distortions, compliance burdens, and resource misallocation. While all taxes affect behaviour to some degree, tax design should avoid cliff edges, unintended incentives, or inefficiencies that reduce economic wellbeing unless these serve a clearly defined policy aim.
What we kept – and why
Several tenets required little more than updated wording. The core commitments to statutory authority, certainty, simplicity, proper consultation, and regular review remain essentially intact. These are enduring requirements of any legitimate tax system, and there was no case for altering them substantively. The fact that the system has drifted further from these standards in the intervening years is not a reason to lower the bar – it is a reason to reaffirm it.
The significant changes
Four tenets have been revised more substantially. Tenet four has been renamed from “Easy to collect and to calculate” to “Easy to administer”, shifting the emphasis from arithmetic to administration more broadly and explicitly addressing the need for taxes to work in a digital environment while remaining accessible to all.
Tenet six changes from “Constant” to “Stable”: a constantly bad system should not be preserved unchanged. Stability – unlike constancy – allows for purposeful, justified reform. Environmental goals have also been introduced, reflecting the growing role of tax in sustainability policy.
Tenet nine broadens from “Fair and reasonable” to “Fair and accessible”, extending beyond HMRC’s exercise of its powers to equitable treatment of taxpayers generally, including timely access to assistance, appeal, and redress.
And tenet 10 moves from “Competitive” to “Efficient” – a more analytically precise test that asks the system to minimise distortions, compliance burdens, and cliff edges, while still capturing the concern about UK attractiveness that the original tenet reflected.
Each tenet now also follows a uniform written format – a title and two sentences, the first stating the principle, the second explaining why it matters. The 1999 originals varied considerably in length and style; whereas the consistent structure makes the tenets easier to apply.
The tenets in use
Of course, the value of the tenets lies not in their publication but in their application. ICAEW will use the revised framework to assess future tax reform proposals – and to press for change where the system falls short. But the tenets also provide a tool for the wider profession, and for anyone with an interest in the quality of UK tax policy.
Consider tenet eight, “Regularly reviewed”, which now explicitly calls for ongoing review of reliefs and policy-driven interventions as well as rules. This matters because the proliferation of reliefs – R&D expenditure credits, inheritance tax provisions, income tax reliefs of various kinds – represents a significant source of complexity and, in some cases, of unintended cost to the Exchequer. A commitment to regular review is a commitment to confronting that accumulation honestly.
From principles to practice
The revised tenets are not an end in themselves. They are a sharper, more coherent version of a framework that has existed for 26 years – and that the UK tax system has, for much of that time, failed to meet. The original tenets were not the problem. The problem was the system's inability to live up to them.
That is why the tenets alone are not enough. A tax system can only be as good as the institutions that deliver it – and right now, as the companion article sets out, those institutions are under serious strain. The revised tenets describe the destination. Whether the system can get there is a different question entirely.
The tenets set the standard. For 26 years, the system has fallen short. ICAEW intends to find out why – and to press, with evidence, for the changes needed to turn those principles into practice. Now comes the harder work.
Ed Saltmarsh, Technical Manager, VAT and Duties
