UK tax policy – bringing clarity to the complex

The UK tax landscape has been evolving at pace over the last decade, layering in new taxes. On top of this the UK is entering a key phase of post-Brexit Britain, negotiating new trade agreements as it repositions itself in the global arena.

The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

This year’s Spring Budget included announcements to stimulate the UK’s growth, particularly to incentivise R&D and capital investment; there were also future policy changes aimed at simplifying the tax system revealed on Tax Administration and Maintenance Day in April. On the ‘Legislation Day’ in July the government published four new consultations in addition to those already announced earlier in 2023. It’s fair to say that the high level of change in tax policy continues, with the number of formal calls for evidence/input and consultations into new tax policy areas issued by HM Government since 1 January 2023 is nearing 50.

Collectively, there are now more than 80 major tax and trade policy areas being implemented or considered by government which businesses need to keep abreast of, including the introduction of a totally new international tax regime applying a 15 per cent minimum tax for large corporates, referred to as Pillar Two.

That’s why we at Deloitte launched our freely available Tax Policy Map. It tracks UK and selected global tax and trade developments, and includes a short bullet point summary of every policy area subject to change. With timelines and links to government documents and further resources in one place, it is updated on a regular basis.

The most populated themes in the Map, unsurprisingly, align with some of the government’s stated priorities, such as encouraging investment and Net Zero. Simplification and modernisation of the tax system are also areas with a multitude of developments, evidencing the importance of reducing the administrative burden on taxpayers while ensuring efficient collection of tax revenues.

Looking ahead, we have experienced that the most popular areas of the map overlay into challenges business leaders are facing, with CFOs reporting a dip in confidence as interest rates, inflation, economic and tightening monetary policy curb their opportunities to invest.

Layering these perspectives into tax, the long-term view on managing effective tax rates and their response to increased governance and reporting mean tax has a strong voice in the organisational strategy – something that will be crucial as firms balance risk and reward.

As executives ride the current wave of market volatility, transparency and accessibility on the policy agenda will enable leaders to assess possible tax exposures and opportunities, something the Tax Policy Map looks to support across both the tax profession and executive level decision makers outside of Tax – for example, Boards, Risk or Audit Committees - to assess possible tax exposures and opportunities. There is more for the tax professionals to keep up with - political parties are beginning to discuss and debate key ideas and policies for inclusion in their respective manifestos, with speculation around abolishing the non-dom status, ending existing carried interest arrangements, or scrapping inheritance tax altogether.

It is expected that the fiscal event in the autumn is due to be an Autumn Statement. With inflation still higher than the Bank of England’s 2% target, we expect to see the government reserving any significant announcements for a bigger fiscal event in the form of a Spring Budget next year, in the lead up to the General Election.

With the tax policy landscape continuing to evolve, it's important that finance leaders engage with the policy changes and take the opportunity to influence the future tax and trade landscape that they will need to operate in.

For more information on the Tax Policy Map, please contact Amanda Tickel or Daria Adepegba.