Tax framework for business released

HM Treasury

The government has published a draft framework for business taxation laying out a set principles to guide the formation of tax legislation.

The framework - just two side of A4 - includes six core principles including maintaining the UK's competitiveness as place to do business and ensuring fairness across the system.

Reaction to the framework was cautious:

Barry Murphy, international business tax partner, PricewaterhouseCoopers LLP, added: “You can't object to any of the principles, but stating them in this fairly non-committal way doesn't move things forward.

"What will be compelling is how actions over the coming months match up to the real core of these principles. A widespread use of the "where possible" type get-outs would potentially undermine the aims of publishing the principles in the first place."

Neal Todd, senior tax partner at City law firm Berwin Leighton Paisner, said: “But the fact that the government has felt the need to set out its intention to abide by principles that ought always have been at the heart of any well ordered tax code - principles such as fairness, stability and certainty - shows how far the UK tax system has been blown off course."

Stephen Herring, Senior Tax Partner, BDO LLP, said: “Despite the UK’s perilous public finances with a fiscal deficit exceeding £175billion both this year and next year, there is no reason to neglect the UK’s attractiveness for the location of global business. Indeed the UK will need to attract more of these businesses which provide direct tax, indirect tax and national insurance revenues for the Exchequer.”

The Treasury said yesterday that the desire for a framework emerged during discussions in its forum on tax which was launched in May 2008.

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