Tax framework for business released

HM Treasury

The government has published a
framework for business taxation
laying out a set principles to guide the
formation of tax legislation.

The framework – just two side of A4 – includes six core principles including
maintaining the UK’s competitiveness as place to do business and ensuring
fairness across the system.

Reaction to the framework was cautious:

Barry Murphy, international business tax partner, PricewaterhouseCoopers LLP,
added: “You can’t object to any of the principles, but stating them in this
fairly non-committal way doesn’t move things forward.

“What will be compelling is how actions over the coming months match up to
the real core of these principles. A widespread use of the “where possible”
type get-outs would potentially undermine the aims of publishing the principles
in the first place.”

Neal Todd, senior tax partner at City law firm Berwin Leighton Paisner, said:
“But the fact that the government has felt the need to set out its intention to
abide by principles that ought always have been at the heart of any well ordered
tax code – principles such as fairness, stability and certainty – shows how far
the UK tax system has been blown off course.”

Stephen Herring, Senior Tax Partner, BDO LLP, said: “Despite the UK’s
perilous public finances with a fiscal deficit exceeding £175billion both this
year and next year, there is no reason to neglect the UK’s attractiveness for
the location of global business. Indeed the UK will need to attract more of
these businesses which provide direct tax, indirect tax and national insurance
revenues for the Exchequer.”

The Treasury said yesterday that the desire for a framework emerged during
discussions in its forum on tax which was launched in May 2008.

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