CenTax key part of new coalition calling for tax reform

CenTax key part of new coalition calling for tax reform

The Centre for the Analysis of Taxation (CenTaxLink opens in a new window), jointly founded and led by Warwick Economics Professor Arun Advani, is a key member of a coalition of think-tanks from across the political spectrum which has today launched a call for fairer, pro-growth reform – without raising overall levels of taxation.

Tax Reforms for Growth, co-authored by experts from think tanks including the Centre for the Analysis of Taxation (CenTax), the Centre for Policy Studies (CPS), the IPPR, the Adam Smith Institute, the New Economics Foundation, Bright Blue and the Joseph Rowntree Foundation (JRF), outlines seven revenue-neutral reforms that they argue would make the UK’s tax system fairer, more effective and more pro-growth.

The team of authors spans the political spectrum but share a view that the UK’s tax rules are outdated and distortionary, that they are holding back investment and productivity – and that change is possible whatever the overall tax take.

The report highlights seven key areas for reform:

1. Replace outdated property taxes with a modern system based on current values. This would involve abolishing Stamp Duty and reforming Council Tax and Business Rates.
2. Lower VAT while broadening the base. Compensate lower income groups for higher costs on basic goods.
3. Address marginal income tax rates that punish work. This includes reducing the marginal rate that applies to the removal of childcare subsidies.
4. Tax income from work equally. Merge Income Tax and National Insurance to remove distortions.
5. Tax landlords on profits as other income. Allow a full deduction for mortgage interest costs, or equivalent allowance for the cost of borrowing.
6. Reform Capital Gains Tax. Introduce an ‘investment allowance’ while tackling exemptions.
7. Reform Corporation Tax. Give upfront tax relief for all business expenditure and end the capital/income distinction in tax law.

The joint report was launched on Wednesday 5th November at a Parliamentary reception attended by MPs from all parties.

Professor Arun Advani, Director of CenTax, said:

The UK’s tax code is riddled with inconsistencies and distortions that discourage investment, penalise work and hold back productivity. There is widespread agreement on the need for proper reform. The upcoming Budget is an opportunity for the Chancellor to look at the taxsystem as a whole, and ensure that whatever the total tax take, any changes are also serving her growth mission.

Robert Colvile, Director of the Centre for Policy Studies, said:

There are all kinds of disagreements among think tanks about the ideal level of taxation, but a surprising level of consensus about the problems with the current system. Whatever your political position, it’s hard to argue that we have a tax system that’s clear, consistent and pro-growth. Hopefully, politicians will be inspired by the broad support for tax simplification across both left and right.

5 November 2025

Photo: Yuan Yang MP speaks at the report's Parliamentary launch.

• Tax Reforms for UK Growth is a joint publication by Andy Summers – Director, Centax; Arun Advani – Director, CenTax; Carsten Jung - Associate Director for economic policy and AI, the IPPR; Chris Belfield – Principal Policy Adviser, JRF; Dan Neidle – Founder, Tax Policy Associates ; Robert Colvile – Director, Centre for Policy Studies; Hannah Peaker – Deputy CEO, New Economics Foundation; James Howat – Chief Economist, Labour Together; James Lawson – Chairman, Adam Smith Institute; Ryan Shorthouse – CEO, Bright Blue
• All proposals are revenue neutral and reflect areas of consensus among economists and policy experts across the political spectrum.
• Read the full report on the CenTax website hereLink opens in a new window.