Tax after coronavirus

Treasury Committee Closed Inquiry
Opened: 17 Jul 2020 Closed: 20 Jan 2022 Parliament page
This inquiry will examine the tax system following the reconstruction of the economy after the unprecedented economic fallout of the coronavirus crisis. It will look at what the major long-term pressures on the UK tax system are, what more the UK can do to protect its tax base from globalisation … Read more
11 Recommendations
25 Conclusions
2 Reports
3 Letters
7 Events
Activity timeline 13 events
14 Sep
2021
Report published
2 Jun
2021
Report published
1 Mar
2021
Report published
18 Feb
2021
Correspondence
18 Jan
2021
Formal meeting (oral evidence session) · Virtual meeting
16 Dec
2020
Formal meeting (oral evidence session) · Virtual meeting
24 Nov
2020
Correspondence
18 Nov
2020
Formal meeting (oral evidence session) · Virtual meeting
20 Oct
2020
Formal meeting (oral evidence session) · Virtual meeting
8 Oct
2020
Correspondence
7 Oct
2020
Formal meeting (oral evidence session) · Virtual meeting
15 Sep
2020
Formal meeting (oral evidence session) · Virtual meeting
Title HC No. Published Items Response
First Report - Tax after coronavirus: the Government’s response HC 144 2 Jun 2021 0 Responded
Twelfth Report - Tax after coronavirus HC 664 1 Mar 2021 36 Overdue
Recommendations & Conclusions
36 results
1 Conclusion
Twelfth Report - Tax after coronav…
The pandemic will leave behind a large increase in the public debt and, possibly, a...
The pandemic will leave behind a large increase in the public debt and, possibly, a rise in ongoing borrowing into the medium to longer term. However, low interest rates have helped to open up fiscal space, and our expert witnesses … Read more
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2 Conclusion
Twelfth Report - Tax after coronav…
The Financial Secretary to the Treasury is right to point to the uncertainties in the...
The Financial Secretary to the Treasury is right to point to the uncertainties in the economic and fiscal forecasts. However, the Government would be prudent not to focus on the OBR’s upside scenario at the expense of failing to prepare … Read more
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3 Conclusion
Twelfth Report - Tax after coronav…
The public finances are on an unsustainable long-term trajectory.
The public finances are on an unsustainable long-term trajectory. This is due primarily to projections of rising age-related spending based on existing Government commitments. This situation is being exacerbated by the fiscal impact of the coronavirus pandemic. Even in the … Read more
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4 Recommendation
Twelfth Report - Tax after coronav…
The Office for Budget Responsibility has been stating that the public finances are on an...
The Office for Budget Responsibility has been stating that the public finances are on an unsustainable long-term trajectory since 2011, but the Government has not done enough to engage with the issue. The Government should routinely produce a more extensive … Read more
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5 Conclusion
Twelfth Report - Tax after coronav…
The evidence submitted to this inquiry generally supports the proposition that the UK is able...
The evidence submitted to this inquiry generally supports the proposition that the UK is able to raise taxation as a share of GDP and raise additional tax revenues. However, there is also a need for reform of the tax system.
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6 Conclusion
Twelfth Report - Tax after coronav…
The public finances are on an unsustainable long-term trajectory that has been exacerbated by the...
The public finances are on an unsustainable long-term trajectory that has been exacerbated by the coronavirus pandemic. Additional tax revenue could make a contribution to addressing this. But the tax measures that are most politically palatable in the short term … Read more
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7 Recommendation
Twelfth Report - Tax after coronav…
We recommend that the Government should do as its predecessors have done during previous crises...
We recommend that the Government should do as its predecessors have done during previous crises and support businesses by introducing a temporary three year loss carry-back for trading losses in both incorporated and unincorporated businesses. This would help those businesses … Read more
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8 Recommendation
Twelfth Report - Tax after coronav…
The Annual Investment Allowance is valued by business and it appears well targeted to promote...
The Annual Investment Allowance is valued by business and it appears well targeted to promote growth in small and medium-sized enterprises. As with all tax reliefs there is likely to be some deadweight cost; but we urge the Government to … Read more
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9 Conclusion
Twelfth Report - Tax after coronav…
Some firms and sectors have seen a significant increase in turnover as a result of...
Some firms and sectors have seen a significant increase in turnover as a result of the pandemic, and some witnesses made arguments in favour of a windfall tax on the profits which have resulted. There are downsides to a windfall … Read more
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10 Conclusion
Twelfth Report - Tax after coronav…
We believe that the development and administration of an annual wealth tax would be extremely...
We believe that the development and administration of an annual wealth tax would be extremely challenging, and we note that other countries have abolished such a tax in recent years. We would not recommend an annual wealth tax. It is … Read more
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11 Conclusion
Twelfth Report - Tax after coronav…
Though those who gave evidence were sceptical of an annual wealth tax, there was more...
Though those who gave evidence were sceptical of an annual wealth tax, there was more support for a one-off wealth tax. It could be used to raise significant revenue. However, amongst witnesses there were significant reservations that a tax imposed … Read more
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12 Conclusion
Twelfth Report - Tax after coronav…
The evidence submitted to this inquiry indicates that raising tax revenue quickly and at a...
The evidence submitted to this inquiry indicates that raising tax revenue quickly and at a large scale is likely to require higher contributions from one or more of income tax, national insurance and VAT, as they currently yield over two-thirds … Read more
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13 Conclusion
Twelfth Report - Tax after coronav…
Based on the evidence we heard and received, we conclude that income tax is more...
Based on the evidence we heard and received, we conclude that income tax is more efficient than some other taxes and we do not see a pressing need for reform at this time. The Government’s manifesto commitment not to increase … Read more
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14 Conclusion
Twelfth Report - Tax after coronav…
Careful consideration would need to be given to any potential increases in income tax, VAT...
Careful consideration would need to be given to any potential increases in income tax, VAT and national insurance contributions, taking into account the degree to which any increases • result in additional economic distortions, • make taxes more or less … Read more
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15 Conclusion
Twelfth Report - Tax after coronav…
The UK has a lower corporation tax rate than other major economies, and we believe...
The UK has a lower corporation tax rate than other major economies, and we believe that a moderate increase in rate could raise revenue without damaging growth, especially if balanced with fiscally appropriate measures to help business, such as enhanced … Read more
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16 Conclusion
Twelfth Report - Tax after coronav…
Given the regressive nature of the benefits accruing to individuals from the current arrangements on...
Given the regressive nature of the benefits accruing to individuals from the current arrangements on pension tax relief, especially those in the top earnings decile, the Chancellor should urgently reform the entire approach to pension tax relief. (Paragraph 123) Priorities … Read more
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17 Conclusion
Twelfth Report - Tax after coronav…
We strongly believe that a major reform of the tax treatment of the self-employed and...
We strongly believe that a major reform of the tax treatment of the self-employed and employees is long overdue. The current system is confused, unfair and unsustainable. The review should incorporate the benefits which accrue upon payment of NICs and … Read more
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18 Conclusion
Twelfth Report - Tax after coronav…
We believe that if the tax advantages of self-employment were to be reduced, then the...
We believe that if the tax advantages of self-employment were to be reduced, then the tax advantages of running a limited company should be considered for reduction relative to the taxation of employees under PAYE.
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19 Recommendation
Twelfth Report - Tax after coronav…
Evidence to this inquiry is clear that differences between income tax and national insurance contributions...
Evidence to this inquiry is clear that differences between income tax and national insurance contributions create distortions and unfairness. While we have not heard enough evidence to recommend a wholescale merger of national insurance contributions and income tax, the Government … Read more
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20 Recommendation
Twelfth Report - Tax after coronav…
We believe that when reviewing the burdens of taxation for the employed and self- employed...
We believe that when reviewing the burdens of taxation for the employed and self- employed and limited companies, the Government should also review the taxation of pensions and the tax relief applicable to pension payments.
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21 Conclusion
Twelfth Report - Tax after coronav…
We recognise that the digital services tax is a useful step towards capturing some of...
We recognise that the digital services tax is a useful step towards capturing some of the profits made in the UK by digital companies. We strongly approve of the Government’s approach in seeking international agreement on taxation of companies providing … Read more
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22 Recommendation
Twelfth Report - Tax after coronav…
We recommend that the Government provide this Committee with an annual report on progress towards...
We recommend that the Government provide this Committee with an annual report on progress towards reaching international agreement on the taxation of digital services, the yield of the digital services tax and the effects of the tax on digital companies … Read more
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23 Conclusion
Twelfth Report - Tax after coronav…
Based on evidence to the Committee, we believe that there is a compelling case for...
Based on evidence to the Committee, we believe that there is a compelling case for the reform of capital taxes.
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24 Conclusion
Twelfth Report - Tax after coronav…
We did not hear or receive any evidence in favour of replacing VAT with a...
We did not hear or receive any evidence in favour of replacing VAT with a retail sales tax. Any contemplation of such a change must be accompanied by more evidence as to the effects it would have, not least on … Read more
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25 Conclusion
Twelfth Report - Tax after coronav…
We welcome the increased flexibility that the UK Government has to set VAT rates—for example...
We welcome the increased flexibility that the UK Government has to set VAT rates—for example we welcome the abolition of the “tampon tax”. We recognise that the VAT system is complicated and that the zero and reduced rates, together with … Read more
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26 Recommendation
Twelfth Report - Tax after coronav…
The Government should, following consultation, set out principles and objectives for the VAT system now...
The Government should, following consultation, set out principles and objectives for the VAT system now that VAT is free from EU law. This should include a framework within which new reliefs can be assessed or existing ones withdrawn. The Government … Read more
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27 Conclusion
Twelfth Report - Tax after coronav…
We recognise the challenge of net zero and agree with witnesses to our Decarbonisation and...
We recognise the challenge of net zero and agree with witnesses to our Decarbonisation and Green Finance inquiry that tax has a part to play in achieving this goal. However, carbon taxes are unlikely to form a major part of … Read more
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28 Recommendation
Twelfth Report - Tax after coronav…
The Government should develop a tax strategy to meet net zero.
The Government should develop a tax strategy to meet net zero. This should include tax measures to incentivise the behavioural changes needed to achieve net zero while at the same time providing short term support in the tax system for … Read more
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29 Recommendation
Twelfth Report - Tax after coronav…
There was widespread agreement among witnesses that stamp duty land tax is economically inefficient, causing...
There was widespread agreement among witnesses that stamp duty land tax is economically inefficient, causing damage to the economy by affecting when and how often people buy homes. This in turn has implications for the flexibility of labour markets and … Read more
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30 Conclusion
Twelfth Report - Tax after coronav…
We have heard strong arguments in favour of reform of council tax.
We have heard strong arguments in favour of reform of council tax. We encourage the Government to consider how best to reform local taxation, taking account of recommendations from the Housing, Communities and Local Government Committee and we draw the … Read more
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31 Conclusion
Twelfth Report - Tax after coronav…
As the previous Treasury Committee concluded in 2019, we believe that the business rates system...
As the previous Treasury Committee concluded in 2019, we believe that the business rates system needs reform. We welcome the current Government review and encourage it to make significant reforms to improve the overall functioning of the business rates system … Read more
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32 Recommendation
Twelfth Report - Tax after coronav…
We believe that a tax strategy setting out what the Government wants to achieve from...
We believe that a tax strategy setting out what the Government wants to achieve from the tax system and identifying high level objectives would have much merit. We recommend that the Government should draw up a draft tax strategy for … Read more
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33 Recommendation
Twelfth Report - Tax after coronav…
The tax policy making process instituted in 2010 (and reaffirmed in 2017) appears to be...
The tax policy making process instituted in 2010 (and reaffirmed in 2017) appears to be sensibly designed; but concerns have been expressed to the Committee that the Government does not always adhere to it and so risks losing the confidence … Read more
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34 Conclusion
Twelfth Report - Tax after coronav…
We believe that the Office of Tax Simplification (OTS) has an important role to play...
We believe that the Office of Tax Simplification (OTS) has an important role to play in identifying how the tax system might be simplified. It is right that the effectiveness of the OTS and its ability to carry out its … Read more
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35 Conclusion
Twelfth Report - Tax after coronav…
We support the plans announced by HMRC in July 2020 to digitise and improve tax...
We support the plans announced by HMRC in July 2020 to digitise and improve tax administration. If tax reform is to be successful, it is important that HMRC has the capacity and funding to carry out reform and is not hindered by out of date systems.
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36 Conclusion
Twelfth Report - Tax after coronav…
Tax commissions may play a role in helping reform particular areas, for example tax reliefs.
Tax commissions may play a role in helping reform particular areas, for example tax reliefs. However, the Government already has an effective tax policy making framework, and an overarching tax reform commission is unlikely to be able to achieve anything … Read more
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Correspondence 3 letters
18 Feb 2021 Tax after Coronavirus follow-up letter - FST to TSC
Parliament page
24 Nov 2020 To committee Letter from the Chair to Rt Hon. Jesse Norman MP, HMT, regarding tax policy statement, dated 24 November 2020
Parliament page
8 Oct 2020 Correspondence with the Chancellor related to VAT RES and the airside Extra Statutory Concession
Parliament page