The IoD is calling for radical tax reform in order to unleash growth and promote enterprise
As part of their pre-election manifesto papers, the IoD have taken aim at the UK’s “hideously complex” tax system which, they argue, is holding the UK economy back. The business group are proposing major changes to the way the government raises revenue in order to boost entrepreneurialism and encourage investment in the UK.
“The IoD’s principles for tax are clear,” says Stephen Herring, the institute’s head of Tax. “We must let businesses, families and entrepreneurs save, spend and invest more of the money they make. In order for this, taxes should be simple, low, fair and compulsory.”
Among the proposals are plans to scrap or merge all taxes which raise less than £5 billion, and end the “scandal of fiscal drag” by triple-locking income tax thresholds. The Conservatives have pledged to raise the higher rate tax threshold to £50,000 if they are elected in May. This would lift some middle earners out of the 40p tax bracket, but will still leave one in six people paying the higher rate, compared to just one in 10 at the start of this parliament.
The IoD are calling for a more robust mechanism to be put in place that protects taxpayers, in the same way the state pension is protected.
Herring claims the changes, if enacted, would amount to a “tax revolution” which would significantly enhance the attractiveness of the UK for both entrepreneurs and investors, while easing the burden of a complicated tax system on families and individuals.