Shadow chancellor Michael Portillo said he was ‘extremely concerned’ about the potential damage the measure would do to British competitiveness and called for prime minister Tony Blair to overrule Brown if the chancellor refused to back down, according to reports in today’s Financial Times.
Brown’s proposals comprise measures billed as part of the Whitehall campaign against tax avoidance but have prompted complaints from multinational companies which use offshore mixer companies to minimise the UK tax paid on profits from low tax jurisdictions.
Portillo warned the measures would lead to businesses which would otherwise invest in the UK choosing to invest abroad.
He added that dismissing these concerns was not an ‘appropriate response’ for anyone conscious of the relationship between a competitive tax regime and the ability to attract investment and jobs.
Analysis – International pitfalls of double tax relief