CIOT is calling on the government to provide all pupils with a basic tax education, arguing that understanding financial matters is an essential requirement to understanding the world outside school.

The institute's comments are contained in its response to a Department for Education (DfE) consultation on changes to the national curriculum, and it says that children should be introduced to the principles of tax at an early age so that they can manage their money well and make sound financial decisions.

CIOT President, Stephen Coleclough, said: 'Most school children will one day become employees when they will need to be able to understand a PAYE coding notice or payslip and to be able to identify when it is wrong. Many will go into business where tax is a key cost and administrative burden that cannot be ignored. An understanding of taxation - how it works, why it is necessary and what the obligations of the taxpayer are - is an essential part of financial education.'

Coleclough also pointed out that teaching about tax is likely to have an immediate impact on some students in areas such as the effect of PAYE and NIC on students, the differences between tax-free and regular savings accounts, and VAT & tax credits.

CIOT is lobbying for the inclusion of specific references to taxes in the Citizenship part of the national curriculum covering three core areas. These are tax and the political/economic system, so students understand why tax is levied and its relationship to the UK's political system; tax and civic responsibility, covering taxation in relation to the rule of law; and tax and mathematics, which will help students in developing numeracy and reasoning skills.

Coleclough said: 'As an educational charity, we are ready to work with the DfE, HMRC and others to build on these ideas so that tax becomes as familiar a feature of school education as Bunsen burner experiments and football.'