Tax and Fiscal Policy

Simplification, not regulation is the solution for tax avoidance


Press Release

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The UK tax system is overly complex and tax rates are too high

Commenting on the Public Accounts Committee’s forthcoming report on the role of large accountancy firms in tax avoidance, Mark Littlewood, Director-General at the Institute of Economic Affairs, said:

“Successive governments have developed loopholes specifically designed to reduce tax bills, so it’s hardly surprising to see companies use the very schemes politicians have created. Politicians need to stop moaning and reform the system they set up.

“The UK corporation tax system is monstrously complex, with profits taxed not in the hands of shareholders, but according to very complex rules in particular jurisdictions. It’s inevitable this system is gamed by multinational corporations; for as long as it’s legal it’s unsurprising that companies don’t pay more tax than is due.

“Tax avoidance occurs because our system is overly complex and because rates are too high. If the government wants to reduce tax avoidance it should reduce and simplify taxes.”

To arrange an interview please contact Stephanie Lis, Head of Communications: 0207 799 8900 or 07766 221 268.

Notes to editors:

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The IEA is a registered educational charity and independent of all political parties.