ACCA Says UK Needs To Play 'Corporation Tax Catch-Up'

by Caroline Maxwell, Tax-News.com, London

09 September 2002

Writing in the Accountancy Age online magazine on Thursday, head of taxation at the Association of Chartered Certified Accountants (ACCA), Chas Roy-Chowdhury warned that the UK government needs to play 'corporation tax catch-up' if it is to compete with the rest of the world in attracting international investment.

Citing the recent announcement that a zero rate of corporate tax will soon be imposed on the Isle of Man, and pointing to the fact that other leading finance centres such as Germany, Hong Kong, Singapore, Ireland, Norway, and Sweden all levy lower rates of tax on their companies, the ACCA tax chief explained that:

'If it (the UK) ignores the current global trend and leaves its corporation tax rate for larger companies at 30%, there is a real danger that the UK will become globally uncompetitive as businesses begin to vote with their feet.'

He continued: 'It will not be enough for the UK to trade on its traditional benefits to attract new business and finance. It needs to face the fact that, with its higher rates of tax and heavy regulatory burden, it will be a less attractive place in which to invest.'

Mr Roy-Chowdhury's Accountancy Age article went on to urge a reduction in the 30% rate, and concluded with the dire warning that: 'With the current economic climate in the UK, doing nothing is not an option in this case.'

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