UK PLC Is Up In Arms Against The Treasury

by Amanda Banks, Tax-News.com, London

19 January 2006

A senior UK tax lawyer has told the Times that Treasury hostility towards the corporate sector could drive major companies out of the country.

Jonathan Ivinson, Head of Tax at Hogan & Hartson says: "Gordon Brown believes that UK corporates do not pay enough in taxes. He has no idea that by restructuring their affairs and relocating staff out of the UK they could leave a huge hole in the public finances". Mr Ivinson says that at least one FTSE 100 company is investigating domiciling itself outside the UK following an 18-month crackdown by Revenue & Customs on tax avoidance

Last November, PricewaterhouseCoopers warned the Treasury prior to the Chancellor's Pre-Budget Report that Britain faces becoming less attractive to big companies because of HMRC's aggressive campaign against tax avoidance.

Richard Collier-Keywood, head of tax at PwC, said: "A lot of UK tax is paid by relatively few companies, and many of those have a choice about where they site some of their operations - the tax situation could persuade them to site discretionary additional business elsewhere."

The Pre-Budget Report itself did nothing to improve the situation, further tightening the screws on tax avoidance, and imposing a windfall tax on the North Sea oil sector. Further clampdowns on tax planning schemes are in the pipeline, said the Chancellor, including a focus on accounting for non-commercial capital losses.

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