Tax policy making – the low-income voice
At the time of the June Budget, the Treasury and HMRC jointly published a consultation document inviting views on the processes behind devising future tax policy. LITRG’s response focuses on how individuals’ voices can be heard and encourages government to focus more on those who currently struggle to be heard.
When it comes to making tax legislation, even if the government does consult early on its proposals, what do lay people know of the consultation process, what the proposals might mean to them and how they can contribute to the debate?
With recent media reports highlighting PAYE taxpayers’ surprise at unexpected liabilities and a YouGov poll reportedly showing that over half the population do not understand their own tax affairs, it is not surprising they know little or nothing of this bigger picture.
- In our response to the consultation on a new approach to the Tax Policy Making process, we therefore highlight the following points:
Low-income individuals might have more to say about tax policy if they understood how it affected them and also felt that their views might be taken into account. In improving understanding, we welcome the formation of the Office of Tax Simplification which we hope will, in time, deliver positive results.
- Most people rely on the media for their knowledge of the tax system, and are therefore susceptible to being influenced through misreporting – government and HMRC must therefore promptly provide factual information about proposed changes in such a way as to be accessible to the ordinary taxpayer.
- Public opinion may be accessed by proxy through consultation with voluntary and community sector organisations.
- A special effort must be made to obtain the views of vulnerable people on low incomes and analysing their needs (also identifying and eliminating or mitigating possible adverse impacts) ahead of policy decisions, rather than in retrospect.
In summary, we propose creating a special low-income team in the Treasury, linking to both relevant parts of HMRC and the specialised tax voluntary sector to address the issues.
You can use this link to read our response.
Contact: Kelly Sizer (Tel: 0844 579 6700 Fax 0844 579 6701)