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ACCA Calls For Clear UK Tax Policy Choices

by Robert Lee,, London

01 December 2014

Ahead of this week's UK Autumn Statement, the Association of Chartered Certified Accountants (ACCA) has urged policymakers to clearly define and communicate the aims of tax measures.

The call is made in a new ACCA report, titled Certainty in Tax, which stresses that certainty, stability, and simplicity are the fundamentals of a good tax system.

It recommends that policymakers take steps to ensure that taxpayers understand what is expected of them. Where Governments allow uncertainty in a system through administrative or judicial discretion, the "boundaries of uncertainty" should be as clearly defined as possible, with guidance made available, it says.

Report author Jason Piper, ACCA's Technical Manager, Tax and Business Law, said: "Regular and constructive dialogue should be a feature of a healthy relationship between business and the state. The outcome of those discussions could be formalized and even published to aid transparency and certainty for both businesses and tax officials, and could form part of the clear guidance which we believe is vital."

The report warns policymakers of the uncertainty that is caused from the use of retrospective legislation, which can also damage taxpayer confidence in the system, potentially leading to lower compliance levels. Piper said: "If an uncertain system allows dishonesty to persist, it will reduce domestic confidence in the administration, and may discourage investment by businesses from other jurisdictions, which means it is in the state's interest to reduce the scope for such developments. The key to certainty is an underlying clarity and coherence of purpose, allied to coherent and consistent messaging from the policymakers and the tax administration itself."

UK Chancellor George Osborne will deliver his Autumn Statement on December 3.

TAGS: compliance | tax | investment | business | government committee | budget | United Kingdom | ministry of finance | tax authority | legislation | trade association | trade

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