The academic task in this coursework assignment focuses on the components of a national tax system that should together create a consensual attitude amongst tax-paying individuals that each person is being treated fairly. Alongside this national consensus there should be an unremitting objective for the tax administration function to ensure that collection and control services deliver robust value-for-money efficiencies in operational activities. In order to gain maximum credit, candidates are encouraged to review the proceedings from a national academic debate chaired by Professor J Mirrlees (2010), referenced “Dimensions of Tax Design, Oxford, OUP” available as a free download from the IFS website and to use other reference sources available through the Mountbatten Library facility such as textbooks, “Economics of Taxation” by James & Nobes, “Taxation – Policy & Practice” by Lymer & Oats and “Taxation Finance Act 2018” by Melville. The Institute of Fiscal Studies website also contains a wealth of material on the topic area.
“It remains our judgement that the current differences in benefit entitlement no longer justify the scale of difference in the level of NICs paid in respect of employees and the self-employed.” (Chancellor, 2017 – extract from Self-employment and the gig economy) “Lack of employment rights doesn‟t justify lower taxes for the self-employed.” (Miller, 2018) “The Supreme Court ruled on 13 June 2018 that a plumber who was officially self-employed was in fact a worker. The case had previously been heard at the Employment Appeal Tribunal and in the Court of Appeal with the latter finding that a „selfemployed‟ plumber should be regarded as a worker.” (ACCA, July 2018).
Assessment criteria The written submission for this assignment will be assessed on the basis of:
1) A review of the economic philosophy of Adam Smith‟s canons of taxation as a guide for fairness and efficiency in taxation systems with respect to income taxation for the employed and self-employed. (20% marks)
2) A classification of taxes by types as direct or indirect and also by impact on taxpayers due to being proportional, progressive or regressive, with reference to employed and self-employed tax payers. (40% marks)
3) Considering contemporary developments and your research findings, critically evaluate if you believe taxation of earned (selfemployed and employees) in the UK is a well-designed and effective tax system? The conclusion should include any recommendations which can be offered to policy makers which may be based on evidence of how other countries deal with the issues you have identified.