Canada and the United Kingdom are the closest of friends. We share values, a common political tradition, and ideas. We learn from each other's triumphs and successes. And, I hope, we can also learn from each other's mistakes and failures.As an outsider, who has endured the U.K. experiment in government-managed tax filing, I feel it is my duty to warn Canadians that it would be a mistake to introduce a similar system here.I have watched with some concern as pressure among Canadian governments to adopt a government-run tax filing system has grown. In the 2020 Speech from the Throne, the Trudeau government promised to “introduce free, automatic tax filing for simple returns.”  In the 2023 federal budget, it announced a pilot project to explore putting such a system into action. The province of Quebec is also experimenting with a similar small-scale test.Canadian policymakers claim Revenue Canada has the technical expertise and capability to file taxes automatically for taxpayers.  To make the case for such a change they point to foreign countries, including the U.K., that have some form of a government-run tax filing system.As someone who works within the U.K. political system, adopting our system of taxation in Canada makes almost as much sense as telling Canadians to start driving on the left-hand side of the road.One reason for that is that, as a federal nation, some powers and responsibilities are shared between multiple levels of government in Canada. This reality creates dynamics and levels of complexity that the U.K. does not face.For example, in my country, we have one tax collecting agency, HM Revenue and Customs, and a much less complicated tax code. The British tax code has three tax brackets and about 65 percent of U.K. taxpayers fall into the second tax bracket. Our taxation policies evolved differently than yours with a different set of tax incentives for individuals that could well impact Canada's implementation (and the effectiveness) of an automatic filing system.In Canada, you essentially have fourteen different tax systems spanning the country. Canadian tax tables are extensive, and vary by province and territory, resulting in more complex calculations. Canada also uses its tax system to incentivize people to use public transit, enroll in sports, donate to charities and other socially positive behaviours.  Tax incentives of this kind are used more rarely, if at all, in the U.K..Even with its less complicated tax code, the U.K still must involve taxpayers in calculating what one owes in taxes, diminishing the benefit of its free-file system. A 2020 report from the Progressive Policy Institute found, “as tax codes around the world have become more complex, many countries that are currently using [free file tax return] systems are increasingly finding it necessary to re-engage taxpayers in order to ensure accuracy.”Over time, this aspect of the U.K.'s system has increasingly become unworkable, and for both political and practical reasons, the responsibility has increasingly shifted back to the taxpayer, defeating the purpose of automation. For example, taxpayers in Britain must now either to ask their employer to adjust their payroll withholdings to account for any interest or dividend earnings they might receive, or make direct payments  to our national revenue agency. This is hardly an improvement on year-end reporting.Until recently, the U.K. required financial institutions to withhold taxes on interest and dividend income, rather than Canada's year-end method of reporting this information to the taxpayer and Revenue Canada. Unlike Canada, the U.K. also does not tie tax credits to a year-end tax return. While we do have tax-related support payments for lower income taxpayers, British citizens apply for those credits throughout the year. They are not distributed as a tax refund.With Canada's more complicated tax code, it is hard to see how Revenue-Canada-generated tax returns will simplify the process for taxpayers.Worse still, the inherent conflict-of-interest in giving the power to file tax returns to the same organization responsible for collecting the money is likely to give rise to concerns that individuals' interests will be secondary to any government's need to generate revenues.Can the public be confident that such a system won't result in higher tax bills?  Would you be able to access all available or appropriate deductions in Canada's complex system? Do you stand a chance if you dispute the government's conclusions? These things are rarely flawless, so will CRA be capable of correcting errors?  Are you willing to take that risk?To all of these questions, my recommended answer would be “no”.The declared goal of Canada's interest in automated tax filing is to reduce the number of low-income individuals who do not file a tax return, so that they can receive the benefits they deserve. This is a sweeping solution to the very specific problem of getting entitlements to vulnerable populations.While this is a problem worthy of attention, the solution should not be to abandon a system that taxpayers already understand, that keeps government at a healthy distance and doesn't involve risky new technology implementation.In my view, the best way to improve Canada's annual tax filing experience is to simplify the tax system. If governments truly want to help Canadians simplify their tax returns, it behooves them to focus on tax simplification, rather encouraging Revenue Canada to get into the tax software business.

Ian Liddell-Grainger is a British Conservative Member of Parliament serving since 2001, currently representing the Bridgwater and West Somerset communities. With the commitment to examine issues from an all-party perspective and better serve his constituents, Mr. Liddell-Grainger has formed several important Parliamentary groups, including the All-Party Taxation Group, Parliamentary Group for Energy Studies, and the All-Party Nuclear Energy Group.