The UK taxes business income at much lower rates than employment income. In this chapter we describe the problems caused by that differentiation and assess the main arguments used to defend it. We summarise the Mirrlees Review’s proposals for radical reform that would align tax rates across legal forms while protecting incentives to save and invest. Finally, we consider the obstacles to implementing such a radical reform and suggest an approach to making progress in practice.
This chapter was published as Chapter 5 in G. Loutzenhiser and R. de la Feria (eds.), The Dynamics of Taxation: Essays in Honour of Judith Freedman.
Authors
Senior Economist
Stuart is a Senior Economist working in the Tax sector, and focuses on analysing the design of the tax and benefit system.
Book Chapter details
- ISBN
- 9781509929092
- Publisher
- Hart Publishing
Suggested citation
Adam, S and Miller, H. (2020). 'Principles and practice of taxing small business' Oxford: Hart Publishing
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