EU tax trade threat

EU tax trade threat

Hurd warns European harmonisation presents 'more tangled problems' than euro

Professional bodies have warned that European Union tax harmonisation measures could mean changes for the UK’s tax system and substantial damage to UK business.

The warnings came as chancellor Gordon Brown was due to meet EU finance ministers to pass measures which could abolish 85 low business tax schemes throughout Europe, including ten in the UK.

But Brown was expected to repeat his determination to use the UK’s veto to block any measures affecting the country’s vital national interests.

Senior technical officer at ACCA, Chas Roy-Chowdhury, said: ‘Tax harmonisation will mean harmonising upwards.’ He warned it could harm businesses and lead to the migration of savings out of the EU.

Some EU members, he observed, had smaller savings markets than the UK and would therefore be less affected by harmonisation.

The issue was also raised by former foreign secretary Lord Hurd, who spoke on the euro at an ACCA Ireland lunch in Dublin last Friday.

Foreshadowing a rash of tax scare stories in the British press, he said: ‘The whole issue of tax harmonisation is coming to the fore in British politics. In many ways, it presents more tangled problems than the euro.’

He referred to the danger tax harmonisation presented to Ireland’s low tax schemes, such as the Irish Financial Services Centre at Dublin docks.

The Institute of Directors also hit out at tax harmonisation this week.

It said: ‘Harmonisation will be upwards to the higher tax rates. Full harmonisation would increase UK taxes by at least #75bn.

‘Businesses faced with increased European tax rates would simply relocate outside Europe. We would lose jobs, income and the tax revenues to pay for public services.’

Francesca Lagerberg, senior technical manager at the English ICA’s tax faculty, said: ‘The impact of tax harmonisation will be enormous because there are so many differences between UK tax laws and those of other European countries.’

Related Articles

Supreme Court rules against Pimlico Plumbers in landmark employment case

Legal Supreme Court rules against Pimlico Plumbers in landmark employment case

1m Alia Shoaib, Reporter
Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

Personal Tax Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

3m Alia Shoaib, Reporter
Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

4m Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

6m Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

7m Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

8m Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

9m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

9m Emma Rawson, ATT Technical Officer