28 February 2008
City report on taxation: UK’s regime becoming less
competitive
Research published today (Thursday) finds that City business
figures consider the UK’s tax framework is becoming less
competitive precisely at the same time as other nations have
reduced their tax rates.
Those surveyed believe more attention needs to be paid to the
UK’s overall taxation regime, especially personal taxation, and
many cite non-dom changes as a negative move, sending unhelpful
signals to talented foreigners.
While the City believes that the Varney principles have won
widespread support, the unpredictable and uncertain approach
adopted by the recently-merged HM Revenue & Customs was also
widely cited in the survey, for which the researchers CRA surveyed
36 key City firms*.
Ireland, Switzerland, the Netherlands, Bermuda and Singapore
were seen to be the winners with the UK’s former EU-leading
position as an attractive tax regime at risk, particularly since
other EU nations introduced lower tax regimes post-2004 - and new
EU members joined with low regimes.
The UK was now seen to be below average on a number of
taxation-related measures, including those of certainty and the
attitude of the tax authorities. More than 80% of those interviewed
felt an avowedly anti-avoidance stance taken by the HMRC had led to
a deteriorating attitude, with less consultation, more unwelcome
surprise and more complexity – all against the widely-respected
conclusions of the 2006 Varney report into a better functioning
taxation system.
Further surprises such as those over Capital Gains Tax and the
regime for those non-domiciled in the UK could lead to a relative
decline in the UK-based financial services industry, said the
report’s authors.
Michael Snyder, Policy and Resources Chairman for the City of
London Corporation, said: “This independent research reveals
worrying indications that the UK corporate and personal tax
regimes, and the manner of their implementation, are impacting
detrimentally on the competitiveness of the UK financial services
sector and beginning to affect business location decisions.”
Download the full report
Ends
Notes for editors
City of London Corporation:
The City of London Corporation is committed to maintaining and
enhancing the status of the wealth and tax-generating business of
the City as the world's leading international financial and
business centre through its policies and services. Examples are the
extensive overseas business missions on behalf of UK-based
financial services and the wide-ranging economic development,
research and regeneration effort the City of London Corporation
undertakes across London. It also runs the City Office in Brussels
on behalf of the City and City Representations in Beijing, Shenzhen
and Shanghai – and a City Office in Mumbai.
Although the City of London Corporation provides local
government services for the City, the financial and commercial
heart of Britain, its responsibilities also extend far beyond the
City boundaries and include management of the Barbican Centre,
Central Criminal Court at the Old Bailey, Epping Forest, Hampstead
Heath, three wholesale food markets, as well as acting as the
London Port Health Authority – and running the Animal Reception
Centre at Heathrow.
Press contact
For more information, Contact Greg Williams, 020 7332 1455,
07889 167 205
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