Thinktanks urge Rachel Reeves to overhaul broken' tax system

"The group, which ranges from the rightwing Adam Smith Institute to the leftwing New Economics Foundation, published proposals for sweeping pro-growth reforms the chancellor could introduce to tax all income from work equally. A separate report on Wednesday from the National Institute of Economic and Social Research (NIESR) urged Reeves to make brave choices and look for an extraordinary 50bn of spending cuts and tax rises to triple the size of her fiscal buffer."

"The UK's tax code is riddled with inconsistencies and distortions that discourage investment, penalise work and hold back productivity, said Arun Advani, director of CenTax, which coordinated the report. The upcoming budget is an opportunity for the chancellor to look at the tax system as a whole and ensure that whatever the total tax take, any changes are also serving her growth mission."

"The signatories suggested reforming council tax, basing the rate on latest house values, and lowering the headline rate of VAT, while applying the tax to more types of spending. Reeves is facing a spending gap, with the independent Office for Budget Responsibility expected to revise down its estimate for trend productivity growth, potentially blowing her 20bn off course. She must also compensate for the 7bn cost of two big U-turns"

Thinktanks across the political spectrum propose a comprehensive overhaul of the UK's tax system, including abolishing stamp duty, merging income tax and national insurance, and taxing all income from work equally. The coalition recommends reforming council tax by updating valuations, lowering the headline VAT rate while broadening its base, and prioritising pro-growth adjustments in the 26 November budget. A separate NIESR analysis urged an extraordinary £50bn of spending cuts and tax rises to enlarge the fiscal buffer. Signatories warned that arbitrary tax rules distort incentives, discourage investment, penalise work and hamper productivity, creating a pressing fiscal and growth challenge.

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