The Chancellor is due to deliver his Autumn Budget in the next couple of months, as the nation holds its breath to find out how the Chancellor plans to pay for his support to individuals and businesses throughout the pandemic. To date, his only announcements have been the freezing of a few thresholds that normally rise with inflation and an increase in corporation tax in 2023.

Corporation tax generates only 6-7% of total tax revenue every year. Most of the money comes from income tax, national insurance and VAT. In other words, tax on what we earn and what we spend. All of the taxes that the current government promised it wouldn’t increase when convincing us to help them win the last election.

The Chancellor needs to be creative in order not to upset the public

The Chancellor isn’t as much out of pocket as it first seems, because of the way the furlough scheme operated. He still received PAYE and employee national insurance on the wages he was funding. But he still needs to be creative if he is not to upset those who put him and his chums into power.

It’s over a generation now since anyone in the Chancellor’s job seriously attempted to reform our tax system. The last was Nigel Lawson in Margaret Thatcher’s cabinet. Everyone since then has tinkered with the system, maybe afraid to upset the waters or possibly because none of them had the stomach for reform or even the ability to deliver it.

We’ve moved on a long way in the last forty years since then. Businesses are much more global, but with our exit from the EU, we’ve become more insular. Technology has made our day to day lives unrecognisable from those of the 1980s. The environment has become an issue with which world leaders struggle to deal. Income levels have changed, mostly for the better, and we spend our money differently.

So is now the time for the current Chancellor to grasp the nettle and reform the tax system comprehensively? He, or anyone who follows him, will never have a better opportunity.