P
aying the wrong amount of stamp duty has cost Angela Rayner her job. The debacle highlights one thing: our tax system is incredibly complicated and unless your affairs are extremely straightforward, you could get caught out.
Taxes have been around for thousands of years. We had them on wool, wine and windows, but it took until 1799 for Britain to have a tax on income, when one was introduced by the prime minister William Pitt the Younger.
Since then we’ve seen tax after tax added. There are now more than 100 taxes in the UK and each comes with pages of rules and regulations. These taxes are being tweaked regularly — between 2022 and 2024 there were no fewer than 240 tax policy changes. Every year we brace for more tax tweaks come the budget. Tax has become complicated, and this complexity increases the risk of mistakes.
What makes thing worse is that our tax regime is so outdated that it doesn’t work for modern households. It is famous for letting down families by ignoring household income. Since the introduction of independent taxation in 1990, our tax system has focused almost exclusively on individual incomes and paid little attention to household or family finances.
