| | |
Share

UK Taxation

Principles

The UK taxation system needs to be simplified for both businesses and individuals.

Comment

Simplification enables both listed and entrepreneurial businesses to focus on their core business drivers rather than the taxation treatment of their decisions.  Consequently, we recognise that the fiscal position means that reductions in tax rates for both businesses and individuals can only be achieved if selected costly / less productive tax reliefs and exemptions are withdrawn.

Simplified taxation legislation with fewer, simpler reliefs and exemptions provides the opportunity for lower tax rates improving the UK’s competitive position to attract foreign direct investment and entrepreneurs seeking to pursue new business opportunities.  This leads us to believe that as the fiscal position is improved, we consider that taxation priorities should include:-

  • further reductions in corporation tax to a rate of 20%;
  • reductions in employers’ national insurance contributions which are rightly described as a ‘tax on jobs’; and
  • a reversal of the continuing erosion in the basic rate tax band which results in an excessive 40% tax rate for individuals on less than twice average earnings.

HRMC need to combat artificial, pre-packaged tax planning schemes, but proper mechanisms should be available to protect commercial structures and transactions from this focus.  Due priority should be given to the measures proposed by the Office of Tax Simplification to reform and reduce the UK’s excessively complex tax legislation to remove perceived need for such schemes.

Accountants and Business Advisers © 2012 BDO LLP. All rights reserved. BDO LLP, a UK limited liability partnership registered in England and Wales under number OC305127, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. A list of members' names is open to inspection at our registered office, 55 Baker Street, London W1U 7EU. BDO LLP is authorised and regulated by the Financial Services Authority to conduct investment business. BDO is the brand name for the BDO network and for each of the BDO Member Firms.