Tax thresholds should be periodically reviewed, says IFS

The review and reform of various tax thresholds is the focus of a report from the Institute for Fiscal Studies’ Tax Law Review Committee (TLRC). The paper Thresholds in the tax system: Policy and administrative considerations was written by Bill Dodwell former tax director at the now closed Office of Tax Simplification (OTS) with two former OTS colleagues Patricia Mock and Sally Campbell. It discusses the difficulties in the main tax threshold rules as they affect individuals and small businesses and considers that policymakers should review these thresholds and exemptions periodically to assess whether they continue to meet the policy intent.

The authors highlighted the variable taper rate applying to the high income child benefit charge saying it is unfair and complicated for individuals to understand and should be replaced with a fixed taper rate.

They suggested further that the starter or savings...