Rethinking the UK Tax System

At a recent panel, leading voices from business, tax advisory and The Centre for the Analysis of Taxation (CenTax) came together to explore the future of UK tax policy, examine what’s gone wrong and what needs to change.

The event, hosted by Malli Kini, Private Client Partner, and chaired by Nimesh Shah, CEO; featured Prof Arun Advani and Dr Andy Summers from CenTax; and Chris Hulatt, co-founder of Octopus Group.

Their discussion revealed a shared concern: the UK tax system is increasingly complex, politically charged, and in urgent need of strategic reform.
Their message? The system isn’t just complicated – it’s broken. And fixing it will take more than tinkering with rates.

Why is the UK tax system so complicated?

One of the most striking analogies from the session compared the UK tax system to a broken IT programme, patched repeatedly without addressing the underlying architecture. The last truly strategic reform was said to have occurred in the late 1980s, highlighting a long-standing neglect of foundational change.

Since then, successive governments have focused on adjusting rates and introducing piecemeal reliefs and short-term fixes contributing to a ballooning tax code and growing confusion.

The business perspective: Stability over speculation

Entrepreneurs are asking: should I leave the UK? That’s new—and deeply worrying.

From a business perspective, the lack of stability in tax policy is seen as a major barrier to growth. Changes to reliefs like Business Property Relief (BPR) risk undermining long-term investment strategies. Entrepreneurs and investors are increasingly uncertain about the future, with some questioning whether the UK remains a viable place to build and scale businesses.

While economic growth is often cited as a priority, the consensus was clear – growth cannot be wished into existence—it must be supported by coherent, long-term policy.

CenTax’s approach: Data-driven reform

CenTax, a think tank led by academic researchers, is using anonymised taxpayer data to inform policy recommendations. Their work on the non-dom regime, Capital Gains Tax (CGT), and partnerships aims to bring transparency and evidence to debates often driven by emotion and politics. Their approach blends economic analysis with legal insight and emphasises the importance of designing tax policy based on actual taxpayer behaviour, not assumptions. During the session CenTax’s Prof Arun Advani and Dr Andy Summers debated: –

CGT as a prime example of poor tax design – Rather than focusing solely on rates, CenTax advocated for reforming the tax base such as excluding inflationary gains and better treatment of losses. They also proposed a “settling-up charge” for individuals who leave the UK after accruing gains, aligning with practices in other countries.

Inheritance Tax and the Non-Dom Cliff Edge – Inheritance Tax (IHT) emerged as another flashpoint for CenTax. The current system, which imposes a 40% rate after 10 years of UK residence, was criticised for creating a cliff edge that drives wealthy individuals to leave. CenTax proposed a gradual tapering approach to IHT exposure, making the system fairer and more predictable.

Encouraging investment in the UK – CenTax also criticised another aspect of the new ‘FIG’ regime for arrivers: that it restricts tax relief to non-UK investments. From a UK PLC perspective, it is obviously not sensible to say to new arrivers “Welcome to the UK! Please invest anywhere but here.” Extending the relief to UK investments, while introducing appropriate safeguards to prevent the conversion of labour income into capital returns, would provide a much-needed boost to UK investment.

Business Property Relief: Targeting the Right Businesses – CenTax’s summer report suggested retargeting BPR to support genuinely family-run businesses at risk of breakup. By focusing relief on estates where the business comprises a significant share, they argued, the Government could better support entrepreneurship while reducing unnecessary tax expenditures.

Across the wider group, another recurring theme that emerged was the lack of coordination between HMRC, Treasury, and business stakeholders. Frequent staff turnover, siloed thinking, and short-termism were cited as barriers to meaningful reform.

The panel called for a more joined-up approach, long-term strategy and better communication across departments.

What needs to change?

As the Autumn Budget approaches, the panel urged the Government to:

• Prioritise strategic reform over rate tinkering
• Provide a clear roadmap for tax policy
• Avoid sudden changes that disrupt investor confidence
• Consider establishing an independent body to oversee tax design

Conclusion: A call for stability and strategy

The panel made one thing clear: the UK tax system needs more than patchwork fixes. It requires bold, data-informed reform and a commitment to long-term stability. Whether through better targeting of reliefs, smarter use of data, or clearer signalling from government, the path forward must be strategic not reactive.

The panel

• Nimesh Shah, CEO, Blick Rothenberg
• Malli Kini, Private Client Partner, Blick Rothenberg
• Prof Arun Advani, Director of CenTax and Professor of Economics at the University of Warwick
• Dr Andy Summers, Director of CenTax and Associate Professor of Law at LSE Law School
• Chris Hulatt, Co-founder, Octopus Group

If you have any questions about the issues raised please get it touch with your usual Blick Rothenberg contact or Malli using the form below.