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The Institute of Fiscal Studies (IFS) has published the findings of the Mirrlees Review which sets out a radical vision for tax reform.  The Review, carried out by a group of tax experts under the chairmanship of Sir James Mirrlees, took four years to complete and proposes change across the whole of the UK tax system.  One of its ideas - a closer integration of the tax and benefits system - has already been partially taken up by Government - but other recommendations will be politically difficult.  They include::

• merging income tax and national insurance contributions into a single tax on earnings;
• extending VAT to nearly all spending and applying a broad equivalent to financial services;
• abolishing council tax and SDLT on residential housing and introduced a new Housing Services Tax;
• exempting risk-free or "normal" returns on saving from tax, taxing only the excess return with losses relieved in full;
• introducing an allowance for corporate equity into corporation tax to equalise the tax treatment of equity and debt investment;
• aligning the tax treatment of employment, self-employment and corporate source income;
• introducing a land value tax for business and agricultural land to replace business rates and SDLT on non domestic property; and
• ensuring consistent pricing on carbon emissions and a comprehensive system of congestion charging to replace most of fuel duty.

Further details of the Report are available on the IFS website.

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