The Low Incomes Tax Reform Group (An initiative of the Chartered Institute of Taxation) published a paper -  ‘A better deal for the low-income taxpayer’. This paper outlines practical steps to making the tax and associated welfare systems work better for people on low incomes.

Press release: Campaigners set out proposals for a better deal for low-income taxpayers, 4 December

The 47 recommendations in the paper are grouped around 7 principles for the tax system that LITRG believe should be firmly lodged in the minds of those designing and managing the tax system. The recommendations are not intended to be exhaustive but merely provide examples of changes that could be made to improve the experience of low-income taxpayers with the tax system. The recommendations include:

  • Making government guidance for taxpayers clearer and easier to navigate
  • More teaching of tax and other aspects of personal finance in schools
  • Maintenance of easily accessible non-digital channels for ‘digitally excluded’ taxpayers to interact with HMRC
  • Considering further alignment of National Insurance and income tax rules
  • New, simpler ways of taxing ‘gig economy’ workers to be explored
  • A senior official to take responsibility for policy on agency workers and umbrella companies
  • Action to ensure all low-income earners benefit from tax relief on pension contributions
  • Amending universal credit rules for the self-employed to better reflect fluctuations in income
  • A clear mechanism for taxpayers to challenge inaccurate information held by HMRC
  • Measures to improve scrutiny of tax policy, before and after its implementation

Attached is a short summary version of the paper which sets out the 7 principles and the 47 recommendations. You can find the full paper on the LITRG website: https://www.litrg.org.uk/latest-news/reports/201204-better-deal-low-income-taxpayer

Please contact Victoria Todd at [email protected] with any queries.