Chancellor should use Budget to reform tax system, IFS says

Chancellor Rachel Reeves should use the Autumn Budget to reform the UK's tax system, says the Institute for Fiscal Studies (IFS).

The think tank says this would help Ms Reeves to raise more revenue while limiting the hit to the economy.

The IFS warns the Chancellor against raising the levels of existing taxes to bring in the estimated £30 billion she requires to stay on course for her targets to repair the public finances.

Changes to wealth-related taxes, including Capital Gains Tax, would be more effective than the introduction of an annual wealth tax, the think tank added.

Isaac Delestre, a Senior Research Economist at IFS, said:

'Revenue-raising seems likely to be a major goal of the coming Budget. But if Rachel Reeves limits her ambition to collecting more revenue, she will have fallen short.

'Almost any package of tax rises is likely to weigh on growth, but by tackling some of the inefficiency and unfairness in our existing tax system, the Chancellor could limit the economic damage.

'The last thing we need in November is directionless tinkering and half-baked fixes. There is an opportunity here. The Chancellor should use this Budget to take real steps down the road towards a more rational tax system that is better geared to promoting the prosperity and well-being of taxpayers.'

Internet link: IFS