PM's adviser warns on tax competitiveness

The head of the prime minister’s business council has made it clear that the
government needs to be ‘extremely careful’ on tax policy.

Mervyn Davis, chairman of Standard Chartered and chairman of the prime
ministers business council, has made it clear that the government need to be
‘extremely careful’ when trying to implement changes to capital gains tax and
taxes on non-domiciles.

Davis has shown concern that the government need to take into consideration
that the new tax policies do not inflict a ‘hugely damaging’ blow to the
competitiveness of the UK’s financial structure.

He told the
Financial
Times that his concerns over the less competitive tax regime had been aired
in private and that ‘individuals (on the council) have not been afraid to make
that view very clear’.

Other members of the council include Sir Stuart Rose, chief executive of
Marks & Spencer; Stephen Green, Chairman of HSBC; Tony Hayward, chief
executive of BP; Sir Terry Leahy, chief executive of Tesco; Dame Marjorie
Scardino, chief executive of Pearson; and Arun Sarin, chief executive of
Vodafone.

Davis said ‘The consistency and the nature of (the tax policy) has been
hugely attractive to overseas people and to companies. We mustn’t lose that
competitiveness. It would be very bad for the UK (and) it would be hugely
damaging for business.’

Business pressure groups have backed the government into partial retreats
concerning the non-dom and CGT issues ahead of next weeks budget announcements.

Richard Lambert, director general of the CBI, has called for implementation
of both sets of changes to be postponed for one year.

Further reading:

PM’s
advisor warns on tax

CBI
hits out at ‘rushed’ non-dom plans

Taxman
still wrangling over non-dom charge