The Government should stop including last-minute tax changes in the Budget if it wants to provide stability in the tax system, according to the Chartered Institute of Taxation.
In its written evidence to the Treasury select committee’s report into the Finance Bill, published this week, the CIOT said it is concerned about the lack of consultation around lastminute changes to the bank levy and rises in the taxation of the oil industry.
It says: “It is better to evolve changes to the way sectors are taxed through consultation rather than pull the changes out of the Budget box. That would allow time to assess the international implications.”
Chancellor George Osborne announced at the March Budget that the bank levy will rise from 0.075 per cent to 0.078 from April 2012 and tax for offshore drilling profits would rise immediately from 20 per cent to 32 per cent.
Osborne also said corporation tax would fall from 28 per cent to 26 per cent last month, further reducing by 1 per cent a year for the next three years to 23 per cent. The CIOT says this is a sensible timeframe that shows regard to maintaining stability in the tax system.
Last month, the TSC released a report calling for tax policy to be made in accordance with the principles of fairness, supporting growth and competition, certainty, stability, practicality and coherence.