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Tax Reform Has Boosted UK's Appeal

by Amanda Banks,, London

07 May 2014

UK Exchequer Secretary David Gauke has described tax reforms as a "central plank" of the Government's economic strategy, and said that there is now high business confidence in the UK's tax system.

Gauke made the comments while addressing the Lord Mayor's Taxation Forum in the City of London. He said that companies are relocating to the UK every week, and that he is "constantly met with a receptive audience" when promoting the UK abroad. He added that the UK has been ranked highest on international tax competitiveness by KPMG for the last two years, and that a HMRC survey had indicated that nine out of ten businesses supported the UK's decision to cut corporate tax rates.

More broadly, he explained that the IMF predicts that the UK will grow faster than any other G7 economy this year, that business investment is forecast to grow rapidly, and that employment is currently at "record levels."

Reviewing recent changes, Gauke highlighted that corporation tax had fallen from 28 percent in 2010 to 21 percent, and that it will fall further to 20 percent next year. He also cited tax incentives for Research and Development, oil and gas exploration, and the creative sector, as well as a new tax policy-making process to ensure proper consultation.

The Minister also spoke of "a constructive relationship built on trust between the taxpayer and the tax collector," which he said raises extra revenue while adding to the UK's attractiveness.

Gauke also discussed attempts to reform tax at the international level. He said that the UK has taken a lead role on the Base Erosion and Profit Shifting project, and that the Government would work with the G20 and the OECD "on the digital economy, on coherence, on substance and on transparency."

He said that many in the business community acknowledge that some international tax rules have failed to keep pace with globalization, and that rules needed to be developed multilaterally to support sustainable cross border trade and investment.

TAGS: tax | investment | economics | business | tax incentives | corporation tax | United Kingdom | oil and gas | tax rates | G20 | tax reform | Tax

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