QUESTION SEVEN

Critics of the current UK taxation system contend that it disproportionately taxes income from work, whereas people who are already wealthy from investments, rent and inheritances are taxed relatively lightly. (Adapted from Tax Justice UK, 2019).

Assume that you are a senior partner of a London-based Tax advisory firm, who has been approached by the Chancellor of the Exchequer to provide advice on the above sentiments as follows:

a) Explain to the minister the implications of such sentiments on taxpayer attitudes and tax collection.

(12 Marks)

b) Advise the minister on measures that the UK government can take to make the tax system fairer

for all taxpayers.

(8 Marks)