The Centre for Policy Studies

Client profile

The Centre for Policy Studies is a think tank and pressure group in the United Kingdom. 

Project scope

Capital Economics was commissioned by the Centre for Policy Studies – a United Kingdom-based think tank – to provide them with an economic model to help them make the case for the implementation of a ‘Simple Consolidated Tax’ for small businesses.

Our research

As part of their mission to support small businesses in the United Kingdom, the Centre for Policy Studies proposed a ‘Simple Consolidated Tax’, a simple levy on turnover that would replace Corporation Tax, Employers’ National Insurance, Business Rates, and VAT. 

We were asked to develop a model to estimate the revenue-neutral tax rate to consider the implications of such a tax. The dynamic model that we created estimated a range of tax rates which accounted for firms’ likely behaviour in adopting the new regime. The model produced bottom-up estimates that were disaggregated by firm size and sector. Our detailed and thorough modelling used a wide range of publicly available official statistics. 

Client deliverables

The analysis provided the Centre for Policy Studies’ with robust figures to support their wider argument that simplifying tax for small businesses will generate more productivity, employment and economic activity across the United Kingdom as a whole.

Client results

Our work was a central component in a report to urge the Government to examine these proposals and make the case to politicians to do more to support small business.