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Research carried out at the University of Exeter Business School (UoEBS) into the design of fiscally decentralized institutions has been instrumental in bringing `vertical fiscal externalities' (an inherent feature of multi-level governments), and the resulting inefficiencies, to the attention of international organizations including the International Monetary Fund (IMF), the World Bank, the Organisation for Economic Co-operation and Development (OECD) and governments worldwide. This work has informed policy decisions and provided awareness of the intrinsic issues and interdependencies between tax decisions at different levels of government through the production of significant theoretical, empirical, and policy literature, and has directly influenced taxation policy directly through changes in fiscal legislation in Germany.
Research by Geoff Whittam and Mike Danson at the University of the West of Scotland looked at the local effects of the Council Tax on poverty and inequality. Their work led to them proposing a new progressive model of `local' taxation called the Scottish Service Tax (SST). The research has been used by NGOs and other organisation to inform their own policy positions and campaigns for taxation reforms and poverty alleviation. The SST model has been cited extensively in submissions to enquiries and debates about Scottish local funding reforms. SST was adopted by the Scottish Socialist Party in 2002 which led to a Bill being put before the Scottish Parliament.
University of Aberdeen research into financial and economic relations between Westminster and Scotland has informed public debate concerning Scottish Constitutional Change and influenced Scottish and UK policy makers in light of Devolution in 1999 and the Independence Referendum in 2014.
Impact emerged through two main channels: First, through UK Continental Shelf (UKCS) research investigating the nature and extent of shares of investment, production, gross revenues and UK treasury tax revenues attributable to an independent Scottish parliament. Second, through accurate research information about the Barnett formula's post-devolution role in fiscal transfers between Westminster and Scotland.
Professors Kimberley Scharf and Benjamin Lockwood have influenced public and policy debate leading to tax policy changes in the UK and EU. Scharf estimated the impact of proposed reforms to the UK Gift Aid program, research that improved public understanding, led to the creation of an open discussion forum for affected parties, and shaped NGO/charity campaigns. Lockwood estimated the tax effects of removing VAT exemption from firms offering financial services in the EU. The methods developed were adopted by EU analysts and underpinned EU estimates of the tax advantages enjoyed by the sector, leading to the 2011-12 imposition of a Financial Transactions Tax within 11 EU member states from 2014.
Vaughan Williams demonstrated the benefits to consumers, betting operators and government of switching from a tax regime based on turnover to a gross profits tax (GPT). Applied initially by the UK Government to general betting (i.e. through bookmakers) and then to bingo and pools betting, GPT was extended in 2013 to gaming machines through a new machine games duty. HM Revenue and Customs used Vaughan Williams' elasticity estimates in setting the rate of machine games duty and to successfully challenge regulatory discrepancies relating to gaming machines and stake limits. Since 2011 other European countries have followed the UK's lead and switched to gambling taxation based on GPT.
Research at LSE by Henrik Kleven and colleagues has significantly improved the design of tax policy and tax enforcement in countries as different as Pakistan and Denmark. These policy impacts can be summarised as follows:
Since it was established in 2005, the Oxford University Centre for Business Taxation (CBT) has had significant and wide-ranging impact on several aspects of the formation of tax policy in Europe. Feeding into the current topical public debate on business taxation, the centre's research on the design and effects of corporation tax and VAT has had impact in several ways, two of which are highlighted here: 1) on a proposal by the European Commission, and the response by member states, to harmonise corporation tax within the EU, in which the research has been partly responsible for the reform not being implemented; and 2) on a far-reaching reform to VAT in Portugal, where the research contributed significantly to the design of the revised VAT system.
Though the individual research agendas have distinctive emphases, the contributions of Aughey, Birrell and Trench have become integral elements in understanding the development of devolution in the United Kingdom (UK). The impact of this work, through engagement with Parliamentary Commissions, Parliamentary and Assembly Committees and policy think tanks, helps define for politicians, administrators, interest groups as well as the general public the relationship between English and British identity, how devolved institutions operate in the context of central government programmes and the options for policy makers in devising financial arrangements which respect devolved autonomy, English interests and UK equity.
Professor Prem Sikka has become widely known in finance circles for his research on the `dark side' of the finance industry. His research on tax avoidance in particular has established him as an expert on the mechanisms by which companies find legal loopholes to avoid tax. As a result he has been asked to use his research to inform policy discussion in three main ways: by consulting with the UK Government's Secretary of State for Business Innovation and Skills; by informing politicians and parliamentary committees in Westminster, Scotland, and France; and by acting as a senior adviser to a number of NGOs concerned with the tax conduct of global corporations. In recognition of his contributions to public discourse he has been named by specialist publication Accountancy Age as one of the 50 most influential figures in UK finance.
Research at the University of Aberdeen on the economics of North Sea oil and gas activity levels and the potential effects of tax changes on exploration and development decisions — and thus on total investment — have informed government and the oil industry of the virtues of ensuring that the tax system produces the appropriate balance between investment incentives and tax revenues.
In particular this work demonstrated the need to accommodate the differential impact of the tax system across offshore fields located in different geographic regions of the UK Continental Shelf (UKCS) which have varying cost characteristics, and the consequent need for tax allowances to avoid investment disincentives and to promote maximum economic recovery.