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- Taxing Times
Written by Mike Beesley | Blog | UK Economy | Posted 14/03/2013
Questions on what is an appropriate level of taxation never go away. However, in the current economic climate the need to cut income taxes for lower income workers to put a little more money in the pockets of working families is juxtaposed with demand to tax the wealthy more heavily whether through income or so called wealth taxes on property.
In the business sector, the debate is equally vexed. On the one hand, government has made welcome cuts to corporation tax but, on the other hand, it is laying in to companies that seek to minimise tax exposure through conducting their business where it is most tax efficient to do so.
While complicated tax avoidance schemes may, as George Osborne says, border on the morally repugnant, the hassle and complicated legal and financial structures required to take advantage of such schemes means that it is only few businesses that go down this route. For most businesses, such as our own, we prefer to focus our efforts on developing the business, being a responsible corporate citizen (that pays its tax) and delivering the best possible return for our shareholders. However, like any other rational business, or indeed individual, we will seek to minimise our tax exposure (who will not be filling up their tank next Tuesday expecting fuel duty to rise in the budget).
But the anti-business message goes beyond corporation tax. For whatever reason, any company making a profit, especially if from government contracts or traditional government services, is seen as a target. Yet, unless companies up and down the country can deliver a return for their shareholders, who is going to bother to invest their money to get a return and deliver the tax revenue and continue to create the jobs and wealth that is so badly needed.
With the budget around the corner, letís just hope that the Chancellor can lighten up a little, advance a pro-business agenda and use the tax system to give the economy a little impetus. But if you want me to be radical I suggest our government looks across the Irish Sea where corporation tax is down at 12.5%. Iíd raise a glass to that this St Patrickís Day!
Mike Beesley, CEO, RSG