The English ICA has called on the Inland Revenue to end uncertainty on double tax relief, which it claims could harm the British economy.
In a paper submitted to the Revenue last week, the institute said uncertainty arose as a result of the Revenue’s current review of double tax relief rules. It welcomed an early indication of government review proposals in order to remove uncertainty about overseas investment.
Frank Haskew, technical manager of the institute’s tax faculty, said: ‘Double tax relief is vital to companies with overseas operations. In order for companies to plan properly, it is essential the government announces as soon as possible what changes it intends to make to the current rules.
‘If it does not, there could be serious implications for the UK economy.’
Haskew added that the Revenue should take the opportunity to make improvements to the current regime.
‘This will encourage multinationals to invest and locate operations in the UK which, in turn, will provide a long-term boost to the UK economy.’
Chancellor Gordon Brown announced he would look at double tax relief rules in this year’s spring Budget.
His comments that the UK government gave #5.3bn in double tax relief every year prompted fears of a reduction in the reliefs available.
The Revenue, however, did not formally ask for comments until August, when it announced that it was preparing a consultative document.
The review will look at the purpose of double tax relief and compare the UK’s methods of giving relief with that of other countries. No timescale for the review has been given.
Senior technical officer at ACCA Chas Roy-Chowdhury added: ‘One of the concerns is that, at the moment, industry knows where it stands with the treaty network.
‘If there is going to be change then companies will need to reconsider their international structures.’
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