Intellectual exodus a UK tax threat
The intellectual economy is putting the security of the UK tax base at risk, according to HM Revenue & Customs figures
Diane Hay, HMRC deputy director of
international corporate tax at , said the UK government is growing increasingly
concerned about the safety of the tax base because it has become easy for
companies built on intellectual property to relocate to low tax jurisdictions.
‘We have concerns over the extent to which our tax base will be there in
years to come. The value of many businesses is not in machinery, but in their
intangible intellectual property and their top people. Those can be easily
located in low tax areas,’ Hay said during an Accountancy Age Insider Business
Club webcast.
The mobility of businesses poses a particular threat to the UK, which has
seen a huge growth in its services sector in the past 30 years.
Tax authorities around the world issued the Seoul Declaration last year, a
charter signed by 35 OECD members outlining how they can co-operate to fight
non-compliance amid concern over the elusiveness of mobile taxpayers.
‘I think it [the declaration] does display a commitment on the part of the
international tax administration community to work together to stop the very
abusive tax planning and avoidance that goes on around the world, by the way in
which we share information and the way in which we address gaps in the
international rule book,’ Hay said.