Written evidence submitted by Cardiff Interdisciplinary Taxation Research Group (CITRG), Cardiff Business School


As members of the Cardiff Interdisciplinary Taxation Research Group (CITRG), we set out below our response to the call for evidence on tax reform post Covid-19.


The scope of the call is broad. We focus specifically on one essential question where we believe we can make a meaningful contribution:


What is the best way to tackle tax reform, including what changes might be needed at HMRC to support implementation, and how should the Government consult with stakeholders and parliament?




CITRG is a new tax research group, established in 2019, based within the Accounting and Finance Section at Cardiff Business School. As a network of tax academics, CITRG network draws its members across different disciplines within Cardiff University, with external members who are world leading experts in international tax scholarship https://www.cardiff.ac.uk/research/explore/research-units/cardiff-interdisciplinary-taxation-research-group. Members of the group have links with important external bodies including the Welsh Treasury and Welsh Revenue Authority, and accounting, tax and legal professional bodies.


Our interests and expertise in tax scholarship lie at the intersection between national, devolved government and international perspectives, including exploring tax as a social practice (Boden et al. 2010). Given the central role that tax systems play in shaping economic and societal landscapes, the group’s activities contribute to Cardiff Business School’s Public Value philosophy.


The aim of the research group is to be agenda setting, and to serve as a platform that facilitates cross-disciplinary research on taxation. 



Dr. Dennis De Widt (Senior Lecturer and co-cordinator CITRG)*

Carla Edgley MA BFP FCA FHEA (Associate Professor and co-ordinator CITRG)*

Professor Kevin Holland

Professor Lynne Oats






Tax reform has been a sticky subject for decades. This is an unprecedented time, however, for rethinking how to approach reform, given the extraordinary impact of the global pandemic on public finances.[i] Difficult decisions made now will be scrutinised for decades. We suggest that a new, broader, diverse approach to tax reform is called for, combined with greater public engagement.


We make the following recommendations:


  1. Involving non-tax experts in tax policy scrutiny: to develop a coherent tax system for all. Freedman (2013) recommended establishing a dedicated independent expert tax institution to scrutinise tax policy decisions. We agree and further suggest that the membership of such an institution also requires non-tax experts who understand how the benefits, pension and savings systems are integral parts of an inclusive approach to policy development. Other insights are required, not just fiscal, but drawing from disciplines such as anthropology, sociology, philosophy, psychology, organisational behaviour and political science among others, so that reform is coherent, for the benefit of all.


  1. Broadening the scope of reform: Tax is too often considered to be an economic phenomenon. Cognitive diversity is important in approaching tax reform. This involves asking what is meant by the term “evidence-based decision-making. Consideration should be given to how evidence is identified, how it is used and what is “left out” in the consultation process. Insufficient attention is directed towards the social aspects of taxation, such as incidence, the breadth of the tax base and how taxes impact on wealth/income distribution.



  1. Underutilised resources: Consultation on tax reform needs greater engagement with the academic community and scholarship. This will widen and strengthen the pool of expertise. To date, practitioner respondents have tended to dominate the way in which evidence is presented. This skews consultation findings, with a focus on implementation and technical issues rather than principles or empirical evidence. Skills resulting in a broader evidence base are missing (Tetlow et al. 2020)   


  1. Engagement with the public on tax reform needs to be carefully managed.  There is a widespread lack of understanding of tax (Tetlow et al. 2020) in society. This is exacerbated by the majority of the population being outside of the income tax net and not required to file returns. Public information is lacking about how the tax system works and what the alternatives are. Education about tax should be more closely woven into the curriculum at the school level. There is far too much misinformation – and lack of trust, especially within social media. Scope exists for MPs to play a more pivotal role in helping the public to understand the need for tax reforms, and how individual tax reforms affect the sustainability of the tax system overall.



Parker (2020) observes how, in spite of widespread discussion about a need for change within institutions and behaviours during the lockdown, we already we seem to be slipping back into old ways; the world has a certain stickiness to it. This tends to limit how we envisage the future. How we approach tax reform is no different.  Action needs to be taken now to bring about meaningful and sustainable change in the tax system; otherwise policy decision-making will slip back into old ways of doing things, at a time when a new way forward is called for.


  1. Involving non-tax experts in scrutiny: to develop a purposive, coherent tax system for all.

Tackling tax reform requires first rethinking how tax reform is approached, particularly who is involved, skill sets, and breadth in areas of expertise. Consultation in the past has tended to focus on specific, narrow issues rather than seeing these in the context of a bigger picture.


Freedman (2013) has suggested establishing a dedicated independent expert tax institution to scrutinise tax policy decisions. We agree this would be meaningful in adding rigour and breadth to consultation but further suggest that the membership of such an institution requires non-tax experts too. Other insights are required, not just fiscal, drawing from disciplines such as anthropology, sociology, philosophy, psychology, organisational behaviour and political science, among others.


Reform needs to include the perspectives of those who understand how the benefits, pension and savings systems are integral aspects of an effective tax system. This is more important than ever. For example, financing long term health problems post Covid-19, particularly among an aging population, incentivising pension saving (Hardcastle, 2012) and social care provision are inextricably linked to current decision-making.[ii] Interdisciplinary perspectives are pivotal if a long term, more holistic approach to consultation on where change is needed, for the benefit of all.


Comprehensive tax reform is preferable as policymakers should treat the tax system as a system of interacting taxes, rather than to consider each tax in isolation (Perret et al. 2016). Where this is not possible, (e.g. a result of limitations in policy or administrative capacity or because it is a more realistic strategy for bringing taxpayers on board), then sequencing tax reforms might be an option (Dewatripont & Roland, 1992) or a series of transitional arrangements.


  1. Broadening the scope of tax reform: Tax is too often considered to be an economic phenomenon.


Tax research has long tended to prioritise the relevance of a quantitative, financial economic approach to understanding tax issues (Hanlon & Heitzman, 2010). However, a growing stream of influential interdisciplinary tax literature has begun to challenge the siloed approach of rational economics. Understanding tax as a social, and not just an economic phenomenon, matters (Boden et al. 2010).


We recommend broadening reflection on what is meant by the term “evidence” as a basis for decision-making. Research commissioned by HMRC is often policy-based evidence, using market research firms, within short time frames, with narrow, specific outcomes sought.


Not only is a more diverse group of experts needed in consultation about reform but greater cognitive diversity. Otherwise, approaches remain fragmented. We identify the following areas in particular where broader evidence is needed to approach review:


  1. Underutilised resources: consultation on tax reform needs greater engagement with the academic community.


Tax consultation has tended to overlook the meaningful contribution that engagement with a broader network of academics could bring to scrutiny of policy and decision-making.  Skills to look at the big picture/broader issues are missing (Tetlow et al. 2020).


The importance of sustainable tax reform

Academic insights assist with looking beyond the immediate objectives of tax reform to appreciate how the process and circumstances involved impact upon the sustainability of the tax system. In this respect, policymakers need to balance different goals that tax systems aim to achieve and consider the major political challenges they face before, during but also after the tax reform process (Brys, 2016).   


Obstacles -  Political influence and piecemeal change

Few major tax reforms have taken place in the UK in recent years. Most tax changes have been tweaks to rates and reliefs as announced in the Chancellor’s budget. UK tax policymaking and reform processes are affected by political cycles and the need for short-term political wins. Politicians may prefer to focus on attracting “swing voters”, who are more likely to change their votes in response to a reform that favours them (Profeta, 2003). This is not in the public interest and results in limited analysis of the impact of proposed tax policy changes for the overall efficiency of the tax system. 


Academics have identified obstacles to the implementation of tax reforms, which apply across countries but some of which are more prominent in the UK. More serious attempts should be made to address these shortcomings in the tax policymaking process. This would improve the quality of UK tax policies but also likely increase public support for the tax system.  


Piecemeal reforms are often undertaken without a clear strategic vision and, whilst benefiting certain groups, they might increase the overall tax burden and reduce the system’s overall sustainability. 


Interest groups

Reversing tax reforms that favour influential interest groups will be challenging and again, insights from academics are helpful here. Policymakers should be aware that the enactment of special tax treatment for particular groups of taxpayers might create new special interest groups (Alt, Preston and Sibieta, 2008). Tax expenditures are particularly prone to creating new special interest groups, and transparency regarding the overall fiscal effects of these tax tools is critical. In relation to other countries, UK transparency in relation to tax expenditures is limited: HMRC publishes evaluations but these capture only 7% of the total cost of UK tax reliefs, and although the Treasury similarly conducts reviews these remain undisclosed and equally only cover a minority of the reliefs (63 out of a total 362) (Tetlow et al. 2020; National Audit Office (NAO), 2020).  


Vision and scope

Tax reform strategies that enable policymakers to reconcile tax policy objectives and successfully carry out reforms do exist. Drawing on Brys (2011, 2016), we highlight key strategies and make particular reference to the UK context.    


Tax reform design should be guided by a clear strategic vision and backed up by solid analysis. Since tax reform is likely to be a lengthy and complex process, articulating broad aspirational goals clarifies the meaning of reform for taxpayers and voters, while making it easier to resist special interest lobbies (Brys, 2016). Implementing a tax reform based on broad goals is unlikely something government ministers and civil servants can do by themselves. Thus, paving the way for reform is critical.  Substantial effort is required to build a broad coalition including academic viewpoints that is supportive of reform.  

Relationships between the Treasury and HM Revenue and Customs

In relation to tax policymaking within Whitehall, improvements could be made. Following the creation of HMRC, the main responsibility for tax policy making moved to the Treasury, especially to make tax policy making more strategic. Although the new set up intended a frequent interchange between HMRC and the Treasury (O’Donnell, 2004) to benefit from the deep technical and operational knowledge of HMRC officials, in practice the interaction has remained limited. There are signs this knowledge exchange has reduced in recent years (Rutter et al. 2017).   


Currently, tax policy development is mainly the responsibility of the Treasury, but the capacity and expertise of Treasury officials to support tax reform is limited. Treasury civil servants, including those working on tax policy, tend to focus on the budget cycle, rather than developing a more holistic analysis of, or plans for, the UK tax system. In addition, the UK civil service model traditionally puts emphasis on job rotation across fields and departments. This does not fit well with tax policy making, which benefits from civil servants developing expertise of what is a comparatively complex policy field.    


The narrow expertise base within the Treasury is further limited by the consultation process itself. Although the government does consult on most tax policy proposals, this generally occurs after substantive policy decisions have already been made. Hence, consultation mostly focuses on acquiring feedback on the details and implementation of proposed policies. This prevents the Treasury from drawing on expertise on the initial design of the policy proposal. Wider consultation is needed from the outset and again there is scope to engage more broadly with academic networks. 


Academic perspectives

Moreover, among participants who contribute to consultation processes, the focus tends to be on implementation more than underpinning principles. An analysis by the Institute for Government (2020) demonstrates that out of 179 consultation documents in relation to tax since 2012, only 15 (or 8%) could be classified as ‘early-stage’ consultations where there is greater scope to discuss principles. Due to the predominant focus of consultations on the implementation and technical aspects of proposed measures, it is specialised tax bodies such as the Chartered Institute of Taxation and Big-4 firms that most frequently contribute to consultations. This skews the way evidence is presented and the evaluation of findings. Other organisations and individuals with valuable tax knowledge, at a more policy rather than operational level, seldom if ever participate (e.g. Tetlow et al. (2020) review shows that the Institute for Fiscal Studies did not contribute to any of the 179 tax related consultations organised since 2012).    


The role of academics in contributing to the quality of tax policy making appears limited.  Although the Treasury makes use of published reports from academics, the Department’s interaction with the tax academic community is limited (Tetlow et al. 2020). Unlike other Whitehall departments, Treasury officials do not have a network of external tax experts with whom they interact. Although informal interactions take place sporadically, the evidence base of UK tax policy making that draws on academic insights is limited. It is important to query why academics do not engage more in consultations (Tetlow et al. 2020).

Valuable lessons can be learned from more structured channels that exists in other fields and countries, such as the Areas of Research Interest (ARIs) published by many Whitehall departments, and the comparatively easy accessibility of tax administrative data made available by tax administrations in the US and Scandinavian countries. Such an approach could spur innovative tax research, expand the UK tax research community, and by doing so significantly strengthen the Treasury’s research and evidence base in tax policymaking, likely at little cost to the taxpayer.   


Clearly, for tax reform to enhance the overall quality of the tax system, the process of implementing change and building tax knowledge capacity needs to receive far greater attention (Brys, 2016)


  1. Engagement with the public on tax reform needs to be carefully managed. 


We also need to look at a big picture with tax systems: not just at the specific design of individual taxes, but how they interact with each other; and with other laws/regulations; how they are administered by HMRC; and crucially, how they are accepted by the public. However, there is a widespread lack of understanding of tax in society (Tetlow et al. 2020). This lack of knowledge is exacerbated by the majority of the population being outside of the income tax net and not required to file returns who are  too insulated from the impact of tax, with no ‘skin in the game’ (Robinson, 2014). There is not enough public information about how the UK tax system works and what the alternatives are. There is too much misinformation, especially in social media.  


Björklund Larsen (2018) has observed that to understand why we pay tax, as well as why individuals do not, we have to study the type of relations, and expectations, that taxpaying is seen to create in society.


For fundamental tax reform to take place, MPs and the Treasury Select Committee are well positioned to play an important and constructive role, such as preparing and helping the public to understand the importance of the reforms and their likely inevitable trade-offs. Obviously, MPs can only fulfil this constructive role if their main priority is to ensure the long-term sustainability of the UK tax system rather than pursuing short-term agendas.  


We also suggest, that while there are online HMRC teaching resources available for schools[v], there is scope to integrate tuition about the public value of the current tax system more closely with the national curriculum.



According to Evans et al. (2018) success in tax reform is more likely to follow from a carefully crafted approach, where change is sustainable and without undesirable by-products. Taking a strategic approach requires a broader time horizon, and a  more evidence based, co-ordinated approach than applied hitherto in UK tax policymaking. While this makes the overall process more complex and demanding for all actors involved, the benefits of taking such an approach for the UK tax system are likely to last for years to come.




September 2020




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Björklund Larsen, L. (2018) A Fair Share of Tax: A fiscal anthropology of contemporary Sweden, Palgrave MacMillan,  at https://doi.org/10.1007/978-3-319-69772-7

Brys, B. (2011). “Making Fundamental Tax Reform Happen,” OECD Taxation Working Paper, No. 3. http://www.oecd-ilibrary.org/taxation/oecd-taxation-working-papers_22235558  

Brys, B. (2016). "Making Fundamental Tax Reforms Happen. Political Economy of Tax Reforms." Workshop Proceedings. [Discussion Paper 025.] Luxembourg: Publications Office of the European Union.   

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Hardcastle, R.  (2012) available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/214406/WP109.pdf

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[i] The OBR predicts that the cost of emergency cash flow reliefs introduced will be between £263 and £391bn https://www.bbc.co.uk/news/business-52663523 11 August 2020

[ii] https://www.telegraph.co.uk/politics/2020/06/27/senior-conservatives-attack-sir-john-majors-plan-raise-taxes/

[iii] In the US, the Government Audit Office has produced a comprehensive guide to the evaluation of tax expenditures

[iv] The rationale for levying a windfall tax would have to be clear but a well-defined tax can be economically efficient though open to criticism on grounds of increasing taxpayer uncertainty as to their tax liabilities. Certain taxpayers have enjoyed a windfall gain from either changes in consumer spending patterns following lockdown or as recipients of an increase in the value of contracts issues by UK central government and governments of the devolved nations.  To the extent that the bulk of the additional contractual spending has been incurred in the UK, there is reduced consequences from recipients of future contracts attempting to shift the tax back on to the government through increased pricing. A windfall tax on government contracts has the advantage of an easily identifiable taxpayer base with contact details know to government, and covers all organisational forms e.g. companies, partnerships etc. In contrast, taxing the consequences of changes in consumer sending risks reverting to the issue of measurement that bedevilled excess profits taxation. 

[v] https://www.tes.com/teaching-resource/hmrc-junior-tax-facts-12106669