June 19, 2014

I was a bit boggled by this, from the Law Society Gazette, when the link made the rounds on twitter last week.  I mean,

The City of London Law Society revenue law committee has called for the creation of an independent body with the power to veto tax legislation.

Seriously?  I can deal with THAT in 140 characters:


I saw the same thing floating around again this morning, so this time I went and looked at what the City of London Law Society revenue law committee actually said.  You can download their report here, and the relevant paragraphs would seem to be

8.3 We believe it would be useful to create an independent body which would have the power to veto the promulgation of tax legislation where either the legislation itself or the policy behind it are insufficiently developed having regard to its proposed effective date. … Whilst to some extent inevitable in a democracy, these phenomena are hugely damaging to the UK tax regime’s reputation for stability, and the creation of a constitutional check to limit the scope for them to occur would in our view be of real benefit.

8.4 Whether or not an independent body is feasible, we would urge a more realistic and open dialogue between ministers and officials about whether proposals are ready to be implemented than would appear to occur at present…

Which is slightly less worrying: the government already allows regulatory proposals to be reviewed by an independent body, the Regulatory Policy Committee, who issue an opinion on whether the evidence base for the impact assessment is of sufficient quality to support the policy proposal.  When the RPC was invented HMRC and HMT waged a successful campaign to have tax measures and their TIINs excluded from this external scrutiny but now that I’m outside looking in, I can see that there might be some merit in the idea, particularly as I wouldn’t have to be involved in doing any of it (!)

But actually I think the City lawyers may have been looking in the wrong direction.  Although there isn’t a mechanism in place for external scrutiny of tax proposals other than Parliamentary debate (and improving the quality of Parliamentary “debate” requires an entire constitution of reform) there IS, of course, a mechanism in place for improving the quality of tax legislation.

It’s called Tax Policy Making: A New Approach and it was invented by the coalition, announced and implemented to some degree of approval from both politicians and the tax profession, and then swiftly allowed to fall into disuse.

In other words, City of London Law Society, I think with the greatest respect that you’re focusing on the wrong issue.  It isn’t the relationship between Ministers and officials that you should be trying to improve (how do you know what it is?  How would you be able to tell if it was better?) but the relationship between Ministers and officials on one side, and the rest of us – tax muggles and tax wizards alike – on the other.  If consultation actually happened when it was supposed to, involved the right people (including some serious effort at involving small firms and individuals affected, spending some money on conducting small firms impact tests and consulting citizen juries, for example), and the New Approach was actually implemented…

…well, it just might work.

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