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The uncertain certainty

22 May 08

The old chestnut that the only two certainties in life are death and taxes should not be uttered in the company of any CA. Unless of course, you are spoiling for an argument

There is unanimity amongst the membership that the uncertainty of the taxation system is a big problem. So it was not a big surprise to hear Alistair Darling admit at the CBI dinner this week that getting business tax right is not easy. I attended the dinner on Tuesday night and the Chancellor’s promise to listen to business and consult was met with a lukewarm response.

Attractive taxation rates and a simplified system are the nirvana for any tax regime. The danger is that the horse may already have bolted before the Government can put steps in place to move towards this idyll. The movement to Ireland of large businesses who previously domiciled in the UK may be a trickle at the moment, but the noises from the rest of the market suggest that may become a flood. The reason is the perception that the UK tax system is hugely unpredictable.

Investors need stability, they do not need evidence of a Chancellor who does not appear to appreciate the consequences of his decisions and who changes his mind with such frequency that confidence is shaken.

Ireland has announced a commission to look at the fiscal framework. It has been very successful in encouraging inward investment and ensuring that companies have confidence in the fiscal regime. That’s why businesses are prepared to locate their headquarters there. The opposite is true of the UK and multinational businesses which are mobile are voting with their feet and leaving or threatening to leave the UK.

So that’s the problem. Alistair Darling’s job is to find the solution. Part of that process has been to put together a group of experts to examine how the UK tax system can be competitive for the next 20 years. A prominent CA, Douglas Flint of HSBC, is sitting on that group. For the sake of certainty, I can only hope the Chancellor acts on their recommendations.

 

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Your comments:


Rosena javed

Wednesday November 12, 2008, 16:18

I need to know who is the author of this article (The uncertain certainty), please reply asap, thanks


Richard Goslan

Thursday November 13, 2008, 08:37

The author of the article The Uncertain Certainty was ICAS chief executive Anton Colella.


Tags:

Anton Colella | blog | tax | Alistair Darling | CBI | Chancellor
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