Blighted Blighty

By Global Tax Weekly

If you own or run a business, the United Kingdom Government claims to be your friend. And by and large it is. By April 2015, the Conservative-led coalition administration will have cut corporate tax by a not insubstantial eight percent since it came to power in 2010. This, in combination with other pro-business tax reforms, including to the foreign profits regime, has turned heads in various parts of the world, most notably in the United States, from where companies have been attempting to make a beeline for the UK, much to the chagrin of President Obama and Congress. And these are policies that appear to have succeeded: economic growth of three percent is predicted this year, which, to the euro-skeptics’ delight, must be rubbing salt into the wounds of the eurozone, showing it up as the failure it was always destined to be when the single currency was fudged in an epic way 15 years ago. Schadenfreude, yes; a word from an appropriate language given Germany’s leading role in cooking up the fudge. Back on topic though, Britain has a long history of being the friend of private enterprise. Let’s not forget that the British Empire was originally a private trading venture before it became a prestige project. Just lately though, dear old Blighty has become quite a difficult and demanding friend, prone to serious lapses of judgment. We know you’re still a bit short of cash now, Britain, but was giving the attack dog that is HMRC so much licence to roam, including powers to raid people’s bank accounts, a sensible thing to be doing? Now the case load of unresolved tax disputes is at an all-time high. Thankfully, somebody has managed to talk you into watering down HMRC’s direct recovery powers. But even more astonishing is your determination to put corporate beneficial ownership information into the public domain. It’s a noble sentiment, but one that will lead to almost certain economic suicide if pursued too vigorously. Not even Brussels wants to go that far. And now I hear that instead of having just one tax system, you’re going to have three, or maybe even more?

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