Time to extend tax debate beyond Westminster

05 October 2017

With tax an inevitable talking point during the party conference season, PwC Head of Tax Kevin Nicholson argues it’s time to open up tax policy debate

History shows many new tax policies fall flat on their face.  Criticised when they're announced, or impossible to push through into legislation.

But it doesn't stop governments from trying.

Cynics could argue some politicians make such announcements precisely because there's little chance of having to deliver them. I disagree.

I believe there is genuine appetite from across the political spectrum for tax reform.  A desire to ensure the tax system reflects how people live and work today, and can adapt for tomorrow.

Reform is different to ad hoc changes.  It's about looking at the tax system in the round and what you want it to achieve. You need a clear end goal that people can buy-into.

This can only happen through proper engagement and debate.  Too often tax policy is devised behind closed doors.  This was the theme of a panel discussion I joined this week with the Institute for Government.  Also speaking were  Nicky Morgan, chair of the Treasury Select Committee, Matthew Taylor, author of the recent review of modern employment practices, and  political commentator, Iain Martin.

Everyone agreed that tax needed to become a public conversation - all too often it’s assumed people aren’t interested or won’t understand. I was heartened by the uniform willingness to make this happen.

I've seen first hand that the opposite is true.  As part of PwC's Paying for Tomorrow programme on the Future of Tax, we've held Citizens' Juries with a complete cross section of the public.  They had no issues getting up to speed with the subject. One of my abiding memories from our first Citizens’ Jury was the fury of the jurors as they presented their closing views to a panel of politicians. The citizens had all thought that National Insurance was a contribution to the NHS. None of them knew it was now effectively another tax going into the treasury coffers. They felt misled.

Of course, encouraging public engagement on a bigger scale easier said than done. But this is no reason not to try.   We need to find new ways to reach people, and technology and social media could hold the key.

This isn’t just about discussing the tax system itself but how Tax should play a part in the big societal issues; such as inter generational fairness. I also believe we need to start early with education on tax (and related issues like pensions) as part of the school curriculum.

We need to develop roadmaps with clear direction on the tax system we are trying to create and we need a way of ensuring that the roadmap survives beyond current political differences and changes at elections.

Nobody pretends that this will be easy. But Brexit means that this is no longer a theoretical issue. We will have to reform our tax systems so let’s start the engagement now.

Kevin Nicholson

Kevin Nicholson | Head of Tax
Profile | Email | +44 (0)20 7213 2794

 

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