Online sales tax would mean 21 new taxes since 2000

15 new taxes have been introduced since 2000. Two of these were one off levies (the Bank Payroll Tax and the Loan Charge) but the rest are still in place. Two further taxes will come in next year (Plastic Packaging Tax and Health and Social Care Levy). Three more are set to be legislated in the next few months (Building Safety Levy, Residential Property Developer Tax and Economic Crime Levy). An Online Sales Tax is now to be consulted on.

Meanwhile no taxes have been abolished over this period.

This includes only taxes introduced by the UK Government. If Scottish and Welsh taxes were included this would add at least four further taxes to the total.

John Cullinane, Director of Public Policy at the Chartered Institute of Taxation, commented:

“There is a strong lobby pressing for a new tax specifically on online sales, and it is reasonable for the Government to consult on this.

“However we encourage the Government to tread cautiously in this area. It is possible that, while much of the burden of business rates is borne economically by landowners, the burden of an online sales tax would be mostly borne by consumers.

“One factor to bear in mind is that we should not just keep adding to the number of taxes the UK has. The Chancellor referred eight times in his speech to tax simplification but we could be set for six new taxes in the space of a couple of years – as many as in the previous eight years. Adding six new taxes to the tax code is not simplification!

“While some of these new taxes are niche measures that will be paid only by a small number of large businesses, the new Health and Social Care Levy will be paid by millions. By being established separately from National Insurance, and with slightly different rules, it represents an unnecessary further complication of the tax system, straining scarce IT and other resources at a time when HMRC’s services to taxpayers and their agents are already under severe strain. Presumably the government preferred to pay this price for the appearance of creating a new tax rather than of increasing rates of an existing one.”

CIOT has also commented on the spending review as it affects HMRC. John Cullinane said:

“The HMRC settlement amounts to a real-terms growth rate of 1.2% per year over this Parliament. That is better than nothing but given the significant pressures on HMRC and the changes – digitalisation, new taxes, new customs arrangements – it has to manage, it is probably less than it needs.

“The importance of delivering good customer service must not be lost amid the transformative ambitions set out in the spending review.”

Notes for editors

1. The Budget Red Book confirms that:

• The Government will introduce a Residential Property Developer Tax (RPDT) from April 2022 on the profits that companies and corporate groups derive from UK residential property development, at 4% on profits exceeding an annual allowance of £25 million.
• The Government will shortly launch a consultation on an Online Sales Tax.
• The Government will be legislating for an Economic Crime (Anti-Money Laundering) Levy in the forthcoming Finance Bill

2. The full list of new taxes introduced by the UK Government since 2000 (or planned), as put together by CIOT, is:

• Climate change levy - 2001
• Aggregates levy - 2002
• Stamp Duty Land Tax (stamp duty on property) – 2003
• Pre-owned assets tax - 2005
• Non-domicile levy – 2008
• Community Infrastructure Levy - 2008
• Bank payroll tax (also known as Bankers bonus tax) – 2009 (one off tax)
• Bank levy - 2011
• Annual tax on enveloped dwellings – 2013
• High Income Child Benefit Charge - 2013
• Diverted profits tax - 2015
• Apprenticeship levy - 2017
• Soft drinks industry levy – 2018
• Loan charge – 2019 (one-off tax)
• Digital services tax – 2020
• Plastic packaging tax - 2022
• Health and social care levy – 2022
• Building Safety Levy (being legislated for in current Building Safety Bill)
• Residential Property Developer Tax (to be legislated for in 2021-22 Finance Bill)
• Economic crime levy (to be legislated for in 2021-22 Finance Bill)
• Online sales tax (being consulted on)

This list includes only UK Government taxes and not those of the devolved administrations. It does not include excise duties and some new environmental sources of income such as the Renewables Obligation, even though they are included within the ‘National Accounts Taxes’ totals in OBR tables. It has been put together by CIOT rather than taken from an official government source so we cannot guarantee its completeness.