TaxCorporate TaxTax complexity costs UK jobs

Tax complexity costs UK jobs

UK's tax system's complexity has cost the country thousands of jobs because investment funds have based themselves in Ireland and Luxembourg where tax rules are less onerous, a new report reveals

The report, from KPMG
and the Investment Management Association
(IMA), comes hard on
the heels of Accountancy Age’s revelation that HSBC is considering
leaving the UK for tax reasons.

Julie Patterson, director of regulation, operations and taxation at the IMA,
said simplifying fund taxation would create jobs and attract other funds to the
UK.

‘We are not asking for tax breaks. We are not asking for privileges. We are
asking government to cut out the complexity,’ Patterson said.

The research revealed that fund assets domiciled in Luxembourg had grown ten
times as fast as those in the UK over the past decade, while Ireland’s growth
had created 10,000 posts – jobs that could have been located in the UK.

Jane McCormick, head of tax in financial services at KPMG, said that survey
respondents from 26 investment management groups had identified tax complexity
as the major reason for choosing Ireland and Luxembourg over the UK.

‘There is not much tax at stake, as the funds do not generate significant tax
revenue, but the UK is facing a perception battle because its taxation system is
more complex and less attractive,’ said McCormick.

For more visit
www.kpmg.co.uk/industries/fs/index.cfm

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