The Paris-based institution also took aim at the UK’s system of VAT reliefs, which are applied to goods including food, children’s clothes and household energy bills, calling them “largely inefficient and regressive”.
They called for those zero and discounted ratings to be ditched, putting the tax up to 20pc, and low-income households to be compensated with benefits to cover the higher cost of paying the tax.
It also objects to council tax on the basis that it is “based on outdated valuations”.
The OECD also recommended the Government take steps to bolster the supply of childcare places to make it easier for more mothers to work, blaming rising inactivity rates as one of the key reasons for Britain’s weak growth in recent years.
“Women make up a disproportionate share of the economically inactive, largely due to family and caring responsibilities,” it said.
“Limited access to affordable childcare raises the opportunity cost of employment, restricting women’s participation in the labour market. While childcare reform is under way, staff shortages and insufficient contingency planning pose risks to its successful implementation.”
On top of this, support for school leavers could help young people into their first jobs, the OECD said.
A Treasury spokesman said: “We are already reforming the tax system to make it more efficient, modern and fair.
“The Government is tackling reliefs that are now costing far more than intended and are disproportionately benefitting the wealthy.”
