UK Chamber Backs Action On MNE Tax Avoidance
Amid ongoing debate in the UK on “corporate tax deals,” the British Chamber of Commerce has said the UK needs to comprehensively simplify business tax rules and eliminate loopholes that are exploited in aggressive tax avoidance schemes.
On February 11, on the same day the Public Accounts Committee took evidence on corporate tax deals, the BCC released a statement calling for a three-prong response to UK base erosion. It recommended that, alongside closing loopholes and simplifying the business tax regime, the Government should tackle aggressive tax avoidance but not punish those who make unintended mistakes, and push for swift international action to stop a minority of companies shifting profits across the globe in aggressive avoidance schemes.
John Longworth, BCC Director General, said: “All businesses with operations in Britain have an obligation to pay the full tax due on profits from their activities in this country. There is great anger amongst many companies on this issue. Most businesses see large-scale tax avoidance by major corporates, and particularly large multinationals, as unfair competition that undermines the implicit contract between business and society. After all, corporations only prosper with the consent of the societies in which they operate. It is in the self-interest of corporates to remember this.”
Longworth added: “The Government has made some strides through engagement with the base erosion and profit shifting process at international level, which have given multinational corporations food for thought. However closer to home, ministers must embark on a wholesale simplification of business tax to eliminate the loopholes that give rise to tax avoidance schemes. The Business Tax Roadmap is due to be published soon, and we hope this makes it easier for businesses to navigate the UK’s fiendishly complex tax system.”
“Until these reforms are realized, all companies with substantial undertakings in the UK should demonstrate their clear commitment to paying the profit taxes due here. Other firms, and the general public, can see through the artifice of creative accounting – and their anger is growing,” Longworth concluded.
