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Tory pledge tax 'early warnings' | Tory pledge tax 'early warnings' |
(about 4 hours later) | |
Major tax changes should be unveiled six months before the Budget and be more heavily scrutinised, the Conservatives say in a report. | Major tax changes should be unveiled six months before the Budget and be more heavily scrutinised, the Conservatives say in a report. |
Ideas to simplify the system and end "stealth taxes" have been drawn up by former chancellor Lord Howe. | |
Shadow chancellor George Osborne said they would "restore trust" in taxes. | |
He said publishing ideas early would avoid problems like those on capital gains reforms but the Treasury said it would prevent "emergency changes". | |
Under a Conservative government, any complex changes would be announced no later than the autumn pre-Budget report - allowing them to be scrutinised by experts and businesses before the Budget. | |
'Invest with confidence' | |
Mr Osborne said: "Future governments will no longer be able to bury the bad news in the small print." | |
He backed the report's calls for a cross-party committee of MPs and peers to be set up specifically to examine tax policy and for a new Office of Tax Simplification, made up of Treasury officials, academics and others charged with making the system more straightforward. | |
FROM THE TODAY PROGRAMME Cameron's Britain: Tax and spend | FROM THE TODAY PROGRAMME Cameron's Britain: Tax and spend |
"At a time of deep economic difficulty, the last thing the Treasury should be doing is creating yet more uncertainty and instability," Mr Osborne said. | |
"With these proposals a future Conservative government will restore trust in the tax system so that businesses and individuals can work, save and invest with confidence." | |
He said arguments over the government's proposals to change capital gains tax and "non-domiciled" foreigners showed the need to make announcements early. | |
'Pretty dangerous' | |
But Treasury minister Kitty Ussher said the proposals were "absurd", adding: "They would prevent your ability to make emergency changes in a Budget - for example, if you discovered a tax-avoidance scam...That would be pretty dangerous." | |
Earlier Lord Howe told BBC Radio 4's Today programme: "What we have seen over the last 10 years has been a doubling in the number of pages of tax law, a lot of changes being introduced at the last minute with short notice and then turning out to be a mess - the 10p tax rate debacle is a very good example. | |
"We simply can't go on multiplying the tax law on our statute book. We have got to begin clearing the undergrowth. That's going to be a long business -that's why it is important to set up institutions to carry it through." | |
The 10p tax rate was abolished by Gordon Brown last year in his final Budget as chancellor. | |
It coincided with a cut in the basic rate of income tax from 22p to 20p, revealed in an unexpected announcement at the end of Mr Brown's speech. | |
But the move backfired when it came into effect as millions of low paid workers were left out of pocket, prompting a backbench Labour rebellion and a government U-turn. | |
Last week a report on the abolition of the 10p rate - and the £2.7bn package brought in to compensate many of those who lost out - raised doubts about the "perceived benefit of seeming to pull rabbits from the hat" at Budget time. | |
The ideas are not official policy yet, but give a clear indication of what may feature in a future Conservative election manifesto. | The ideas are not official policy yet, but give a clear indication of what may feature in a future Conservative election manifesto. |