The Institute for Fiscal Studies (IFS) has proposed extending VAT to nearly all spending - including financial services - following its wide-ranging review into the UK's tax system.
It said the UK applies a zero rate of VAT to far more goods and services that most other countries and believes a change could reduce complexity and, as a result of the extra money raised, lead to a reduction in income tax. It pointed out it believes it would be "hard to apply" VAT to financial services in the same way it is applied to other goods and services, but it said a tax "broadly equivalent" to VAT should be applied. The review also suggests inheritance tax (IHT) should be completely changed because it is ‘ineffective', and allows the wealthy to avoid paying it by exploiting l...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes