Companies should stop tax avoidance and pay fair share
An overwhelming number of finance directors (67%) have backed the chancellor's Budget day decision to attack tax avoidance.
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Despite the attractiveness of creative tax schemes to some firms, the majority (67%) of FDs claimed that Gordon Brown was right to close loopholes according to the latest Accountancy Age/Reed Accountancy ‘Big Question’ survey.
Many argued that the more the chancellor was able to clamp down on existing tax loopholes and get companies to pay their fair share, the better it is for the rest of society’s tax burden.
During last week’s Budget speech, the chancellor unveiled new powers for the Inland Revenue to stamp out the tax avoidance schemes. New disclosure rules mean that, in the future, accountancy firms will have to explain to the Revenue what loopholes are being exploited before they are recommended to clients.
Almost half (45%) of FDs said this was a good move. ‘It may spoil the fun for whizz accountants, but if everyone pays their fair share, the rest of us need pay a little less,’ said Bryan Armour of the Parchment Housing Group.
Another respondent described the loopholes as ‘shoddy practice’ that the chancellor was right to attack. Others claimed Brown should have gone further, and there was even some schadenfreude in the response of one anonymous public sector FD.
‘I feel it is about time that our friends in the private sector start paying the correct level of taxation.’
Despite strong backing for the chancellor, there were some dissenting voices. Among the 9% of ‘no, definitely nots’ was Frank Eliel of Signs Express, who said: ‘[Tax avoidance] may well be irritating to the government, but if they consulted more, better laws would be passed.’
A further 11% answered ‘no, probably not’ with 13% remaining neutra