Importance of certainty in tax policy-making

The opening sentence of the foreword to the Corporate Tax Roadmap published in October 2024 states that the government is ‘determined to provide the stability needed by businesses to make investments that are critical to boosting growth in the UK’. Tax policy initiatives to create stability predictability and certainty for businesses subsequently permeate the document with promises of consultations to create the necessary environment for businesses to flourish in the UK.

At the Spring Statement the government published two such consultations:

• An HMRC consultation – R&D tax relief advance clearances; and
• A Treasury consultation – Advance tax certainty for major projects.

This article seeks to initially consider why ‘certainty’ is a fundamental tenet of tax policy-making. We subsequently consider how tax rulings assurances and clearances can in theory help a tax system move towards certainty and look at some of the design principles...