A new IFS report provides an assessment of the UK government’s record on tax from 2010 to 2024. Key findings include:
direct taxes have been increased on high-income individuals but cut on low and middle earners;
more revenue is now being raised from income tax, VAT, corporation tax and capital taxes;
there have been big swings in the direction of some major policies: for example; the income tax personal allowance was increased for years before 2019 but is now on a declining path; the main rate of corporation tax was cut substantially until 2017 and then increased sharply in 2023; and rates of NICs continued their long-run upward trend until recently but have now been sharply reduced; and
there has been a move towards greater complexity, with more than a dozen new taxes introduced since 2010, and many new rates and reliefs added to existing taxes.
Helen Miller, IFS Deputy Director and an author of the report, said: ‘Unfortunately, governments have chosen not to fix any of the big structural problems with how taxes are designed. The list of major tax problems in 2024 is a copy-and-paste from the 2010 list. Missing the opportunity to reform taxes substantively means missing opportunities to boost growth and remove inequities that arise when similar people are taxed differently. Whether the next government chooses to raise or cut taxes overall, we should all hope that it will choose to leave us with better taxes.’
A new IFS report provides an assessment of the UK government’s record on tax from 2010 to 2024. Key findings include:
direct taxes have been increased on high-income individuals but cut on low and middle earners;
more revenue is now being raised from income tax, VAT, corporation tax and capital taxes;
there have been big swings in the direction of some major policies: for example; the income tax personal allowance was increased for years before 2019 but is now on a declining path; the main rate of corporation tax was cut substantially until 2017 and then increased sharply in 2023; and rates of NICs continued their long-run upward trend until recently but have now been sharply reduced; and
there has been a move towards greater complexity, with more than a dozen new taxes introduced since 2010, and many new rates and reliefs added to existing taxes.
Helen Miller, IFS Deputy Director and an author of the report, said: ‘Unfortunately, governments have chosen not to fix any of the big structural problems with how taxes are designed. The list of major tax problems in 2024 is a copy-and-paste from the 2010 list. Missing the opportunity to reform taxes substantively means missing opportunities to boost growth and remove inequities that arise when similar people are taxed differently. Whether the next government chooses to raise or cut taxes overall, we should all hope that it will choose to leave us with better taxes.’
