FD group tells taxman to back off

The debate on tax should be shifted away from avoidance and onto issues of
global competitiveness, the chairman of the Hundred Group of Finance Directors
has said.

At the launch of the Oxford University Business Tax Research Centre last
week, Jon Symonds told a meeting of tax professionals that there had recently
been ‘too much discussion about anti-avoidance’ and that the new centre provided
a ‘wonderful opportunity to shift the debate’.

The rare comments on tax matters, in perhaps Symonds’ last public appearance
in his capacity as chairman of the influential Hundred Group of Finance
Directors, will be seen as an attempt to force the attention away from what
businesses do and onto tax policy.

It drew an immediate response from Dave Hartnett, director general of HM
Revenue & Customs, who told Accountancy Age after the meeting: ‘I would
happily see the debate move on if avoidance wasn’t an issue.’

Business and government have been engaged in a ferocious debate in recent
years over tax avoidance.

The battle has hotted up recently with HMRC pledging to make tax avoidance
‘not worthwhile’ by 2008.

This week, PricewaterhouseCoopers disclosed that senior business people were
being contacted by HMRC officials, who are keen to clarify whether some of their
tax policies were overly aggressive.

HMRC has also been clamping down on avoidance in particular, and tax advisers
are expecting a raft of new measures in the pre-Budget report, as well as a
tightening up of the disclosure regime on tax avoidance.

Symonds argued that it was time to move on from such arguments, away from
individual tax discussions to look at the system ‘as a whole’.

He echoed the views of advisers who suggest that anti-avoidance initiatives
and higher taxes are encouraging businesses to set up elsewhere, reducing the
tax base as a whole.

Referring to research by the Hundred Group conducted with PwC, Symonds said
that far from just paying corporation tax, businesses paid 18 different taxes.

The research should produce an idea of a ‘total tax contribution framework’,
a new accounting model that reflects the range of contributions businesses make
to government.

Symonds said that UKbusinesses wanted to contribute ‘greater absolute taxes
as profits, but smaller relative taxes’. Businesses have ‘real concerns about
the deterioration of competitiveness in the UK’, he said.

Related reading