Chancellor takes up Institutes’ proposal for fewer Budgets

The Chartered Institute of Taxation (CIOT) has welcomed the Chancellor’s announcement that the Government will be reverting to a single annual fiscal event.

The CIOT, along with the Institute for Government (IfG) and Institute for Fiscal Studies (IFS), had called for this move in an open letter to the Chancellor in September. The letter contained some early recommendations from a project the three organisations are undertaking to look at how to improve tax policy making. This will lead to a full report in January 2017.

CIOT President Bill Dodwell commented:

“This is a welcome move from the Chancellor. Tax change is one of the greatest causes of tax complexity, and having two major fiscal events a year encourages government to keep fiddling about with the system.

“No other major economic power feels the need for two big sets of tax and spending changes each year. The Chancellor has sensibly acknowledged that doing less will enable HMRC and the Treasury to put more time and effort into making sure the changes they do make are effective and well-targeted.”

The relevant part of the letter, signed jointly by Bill Dodwell for CIOT, IFS Director Paul Johnson and IfG Director Bronwen Maddox, read:

“Return to a Single Fiscal Event. The last two decades have seen a proliferation of measures in Budgets and very long finance bills become the norm. In effect, we now have a March Budget and a November/December Budget.

“The time has come to revert to one principal fiscal policy event a year (while recognising there may still be a need for technical changes at other times of the year). Reducing the frequency of new significant changes of direction would release resource for better consultation, produce higher quality legislation and more effective implementation, make life simpler for taxpayers, and potentially increase the impact of measures concluded upon. We also think that Budgets should return to being principally a vehicle to announce revenue measures, rather than spending or other policy changes.”

Notes for editors

1.       The letter to the Chancellor can be read in full here.

2.       The Government briefing note on the change states: “Businesses, economy and tax experts like the International Monetary Fund, Institute for Government, the CBI, Chartered Institute of Taxation and the IFS have all been calling for this change. It will mean businesses and people face less frequent changes to the tax system, helping to promote certainty and stability.”

3.       The Chartered Institute of Taxation (CIOT)

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.

The CIOT’s 17,600 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.uk (Out of hours contact: George Crozier, 07740 477 374)