Law reform needs US-style body: CIOT

The Chartered Institute of Taxation (CIOT) has called for a rethink to the ‘deeply flawed’ way in which the UK effects tax law changes, saying a new, US-style parliamentary body would help lead the way to reform.

The professional body has insisted that many facets of the tax law-making process demand improvement, and a key part could be played by a joint committee on taxation, which would comprise MPs and peers who would scrutinise tax legislation and make recommendations of changes.

Such a committee, backed up by a professional staff, could play an important role in reducing the amount of badly constructed laws, which can give taxpayers unintended opportunities to avoid tax while others face unintended losses, argues the CIOT in a newly published paper.

‘The way tax law is made in the UK is deeply flawed,’ said the organisation’s president, Vincent Oratore. ‘There is not enough expert scrutiny, and there is insufficient parliamentary time to consider properly the effect that changes will have in practice.’

Mr Oratore suggested that the US model of scrutiny of tax legislation should be introduced in the UK: ‘We have a historic and distinctive parliamentary system… but in this area I believe we can learn something from the Americans, who have a well-resourced joint committee on taxation that enables members of both houses of Congress to play a meaningful and constructive role in the making of tax law.

‘There is a growing consensus among thinkers in this area – within Parliament, and among tax professionals, political analysts, researchers and constitutional experts – that the [tax legislation] system could, and should, be better,’ added the CIOT president, who has made tax law reform the key theme of his year in office.

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