New 'Tax Framework' exasperates UK businesses

23/02/2010

The government’s ‘Tax Framework for Business’ has done little to allay the fears of companies registered in the UK.

The framework, revealed that the global trade and investment conference in London, is intended to prevent a raft of businesses from relocating offshore and to other jurisdictions with friendlier tax environments. However, instead of boosting business confidence in Britain, it left companies without a solid pledge from the government to improve the UK’s tax environment.

Gordon Brown simply stated that the importance of businesses would be reflected when the government embarks upon the process of “reviewing, revising and developing business tax policy.” The prime minister went on to pledge a tax system based on “competitiveness, fairness and simplicity.”

Sir Martin Sorrell, the chief of advertising firm WPP, which has already relocated its headquarters to Ireland, responded with the following statement, "the government is moving in the right direction. But the devil will be in the detail. There weren't enough specific changes to encourage us."

PricewaterhouseCoopers’ international business tax partner, Barry Murphy, echoed Sorrell’s concerns: "you can't object to any of the principles, but stating them in this fairly non-committal way doesn't move things forward."