Inquiry into ‘Tax after coronavirus’
Sep 10, 2020
The impact of Covid-19 on the UK’s public finances recently led the Treasury Select Committee to launch a new inquiry called ‘Tax after coronavirus’.
The country’s economy has taken a huge hit in the wake of the coronavirus crisis, and we find ourselves in the first recession since 2008. The government has borrowed billions of pounds in order to help keep businesses both big and small afloat, in a bid to prevent mass unemployment.
Working out how to recover from such unprecedented economic fallout has provided an opportunity for the government to examine the state of the UK’s current tax system. If a suitable level of public services is to be maintained, at sustainable rates of borrowing, the UK needs a strong tax base going forwards to recover from the crisis. The government has therefore called an inquiry to decide whether its economic response to the pandemic should be reflected in changes to taxation.
Inquiry call for evidence
The Treasury Select Committee recently opened a call for evidence which ran for several weeks, during which it sought to establish the pressures facing the tax system in the UK and which areas are most in need of reform, in order to restore public finances in the wake of the pandemic.
The Committee also addressed what overall level of taxation the economy can bear, the role of tax reliefs in rebuilding the economy, and whether there is a role for windfall taxes in the post-coronavirus world.
Mel Stride MP, chair of the treasury committee, said:
“The UK economy, like many economies around the world, has been placed under extraordinary stress due to coronavirus, with the worst of the economic fallout perhaps yet to come.
“Tax will play a major role in the years ahead in restoring the public finances and ensuring that we have a recovery which is balanced across the UK and fair to all.”
The president of The Chartered Institute of Taxation (CIOT), Glyn Fullelove, also commented:
“The UK economy faces enormous challenges in the aftermath of the Covid-19 pandemic.
“Whatever policies are adopted to meet the challenges ahead, being able to predict what the UK tax system will deliver under any given set of measures is vital for the Chancellor of the Exchequer. Exploring whether this is possible is a vital task.”
The ‘Tax after coronavirus’ call for evidence closed on 8 September 2020, and we await any conclusions. Attention now turns to the Autumn Budget 2020. No date has been set by the Treasury yet, but it would normally take place in October or November. In the meantime please get in touch with the PT team if you have concerns about how Covid-19 has affected your finances.