2020 Tax Commission’s Vision

The 2020 Tax Commission, which is a joint project between pressure group Taxpayers' Alliance and the Institute of Directors, published its final report containing recommendations for the future structure of the UK's tax system. Its findings are a culmination of gathering evidence over a period of 18 months and signal the start of a new campaign.

In a 400 page report, the Commission sets out its radical and, what it believes to be, realistic reform of the tax system, and calls for the abolition of eight taxes and the creation of just one Single Income Tax. The recommendations are as follows:

1. Taxes should be cut to 33% of national income;
2. Marginal rates should not exceed 30% and the personal allowance should rise to £10,000;
3. Taxes on capital and labour income disguised as business taxes should be abolished and replaced with a tax  on distributed income;
4. Transactions, wealth and inheritance tax should be abolished;
5. Other consumption taxes to remain for the present time but transport taxes should be cut; and
6. Local authorities should raise half of their spending power from local taxes.

Other highlights from the report are:

• Income tax and Employees/Employers NIC should be merged into a single tax on labour income, with rates levelled down to protect certain groups from higher bills;
• Corporation Tax and Capital Gains Tax should be replaced with a single tax on capital income – dividends, interest and rent – at a rate of 30%;
• Stamp Duty and Inheritance Tax would be abolished;
• A Fuel Duty cut of 5p per litre and the abolition of Air Passenger Duty.

The 2020 Commission claims its proposals would result in substantial tax cuts for households and provide a significant boost to economic growth. For example, a two earner household with an income of around £28,000 would enjoy a tax reduction of approximately £3,400. These measures, it claims, will result in taxpayers being treated more fairly and taxes becoming lower, simpler and transparent.