Administration

In this chapter we consider how some of the proposals discussed elsewhere in this Report could be administered in practice. Further investigation is clearly needed, and therefore the conclusions in this chapter are somewhat tentative. We have drawn to a large extent on the report and proceedings of the Select Committee on Tax Credit, ¹ which considered a number of problems which are equally applicable here. We shall consider first the changes in the general structure which we propose, such as the taxation of social security benefits, personal allowances and the tax unit; next the problems of an expenditure tax; and finally the possibility of self-assessment. There is no doubt that a system which allows for frequent year-end adjustment, which is a feature of self-assessment, provides a far more flexible framework for a tax system, being able to deal readily with a smooth progression of rate scales — unlike the existing system, which depends upon having a lengthy band at a fixed basic rate. The changes will initially be considered in the light of the rate structure continuing to exist in this form.