The Institute of Chartered Accountants in England and Wales (ICAEW) has announced the formation of an independent Future of Tax Commission to conduct a comprehensive review of the UK tax system and propose practical reforms. Chaired by former Treasury minister Mark Hoban, the commission aims to address the growing complexity and inefficiencies that have accumulated over decades of piecemeal tax changes.
Tax law in the UK has become increasingly intricate, with more than a thousand reliefs embedded within a system whose official handbooks have expanded from around 1,600 pages in the 1970s to over 23,000 pages today. This complexity is not just a bureaucratic challenge but also influences individual and business financial decisions. For instance, some parents earning near £100,000 are confronted with high effective marginal tax rates due to the withdrawal of personal allowances and loss of tax-free childcare benefits. Similarly, small business owners approaching the VAT registration threshold often reconsider additional contracts because of the added tax liabilities and administrative burdens.
The ICAEW highlights these examples to underscore how tax rules can unintentionally discourage work, investment, and growth across the economy. In 2010, the Mirrlees Review advocated for a tax system designed as a cohesive whole rather than a patchwork of separate measures. However, despite this recommendation, tax policy developments have largely continued to add complexity without addressing the interplay among various elements of the system.
Alan Vallance, chief executive of ICAEW, emphasized that their profession’s members, who work closely with businesses of all sizes, regularly witness how tax uncertainty hampers investment and hiring decisions. According to ICAEW surveys, more than two-thirds of their members say greater clarity and consistency in tax and regulation would increase their willingness to invest.
The new commission seeks to move beyond identifying problems by assembling expertise from business, economics, academia, and public policy. It aims to clarify what objectives the UK tax system should serve and to weigh the trade-offs inherent in reform efforts. A core focus will be on practical implementation—specifically, how to achieve change in a system with entrenched interests and complexities, including determining who would gain or lose and the sequence in which reforms should be introduced.
By launching this initiative, the ICAEW hopes to provide a realistic blueprint that can guide policymakers toward a tax system that supports economic growth, reduces unnecessary complexity, and improves certainty for taxpayers.