TaxCorporate TaxUK tax competitiveness reaches tipping point

UK tax competitiveness reaches tipping point

CBI warns that significant tax policy shift is needed if UK is to remain competitive

city of london

The
CBI
has called on the
Treasury to take a
serious look at the competitiveness of the UK tax system.

The CBI employers’ group, in its submission to the Treasury ahead of the
Budget, said that the increasingly uncompetitive tax regime was holding back the
economy and leading to companies relocating overseas.

Ernst & Young, meanwhile, has warned that tax policymakers need to make
significant changes to the tax system if the UK is to remain an attractive venue
for foreign investment.

In a report entitled ‘Helping Britain Thrive’, the firm examined different
indicators around the competitiveness of the UK tax regime and compared them to
a similar exercise carried out in 2001.

The report found that the UK had lost ground on the tax base, the rate of tax
and the administration of tax collection.

Chris
Sanger, head of tax policy development at Ernst & Young
, said
although tax was not the only reason for investing in a country, it was becoming
increasingly important, as other elements were becoming more common.

Sanger called for all policy decisions to avoid complexity and said policy
should be designed with the UK’s competitiveness as an investment location in
mind.

‘We need to move away from complex legislation to robust and clear
principles,’ said Sanger. ‘The Varney review is a step forward, but in reality
much more has to be done. We are at a crucial point.’

Further reading:

Government to review HMRC

HSBC: ‘we’ll quit UK over tax’

Taxman to offer clearance procedures

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