The British Chambers of Commerce (BCC) is urging the government to embark on a wholesale simplification of business tax to eliminate the loopholes that give rise to tax avoidance schemes.
Most businesses see large-scale tax avoidance by major corporates, and particularly large multinationals, as unfair competition. In order to limit the scale of this, the BCC is calling for immediate action on three fronts:
• A wholesale simplification of business tax to eliminate the loopholes that give rise to tax avoidance schemes
• HMRC enforcement activity to concentrate on aggressive tax avoidance, and not punish those who make unintended mistakes
• Push for swift international action to stop a minority of companies shift profits across the globe in aggressive avoidance schemes.
The Parliamentary Public Accounts Committee has been taking evidence today (10 Feb) on corporate tax deals.
John Longworth, BCC Director General, said:
“All businesses with operations in Britain have an obligation to pay the full tax due on profits from their activities in this country.
“There is great anger amongst many companies on this issue. Most businesses see large-scale tax avoidance by major corporates, and particularly large multinationals, as unfair competition that undermines the implicit contract between business and society. After all, corporations only prosper with the consent of the societies in which they operate. It is in the self-interest of corporates to remember this.
“The government has made some strides through engagement with the Base Erosion and Profit Shifting (BEPS) process at international level, which have given multi-national corporations food for thought.
“However closer to home, ministers must embark on a wholesale simplification of business tax to eliminate the loopholes that give rise to tax avoidance schemes. The Business Tax Roadmap is due to be published soon, and we hope this makes it easier for businesses to navigate the UK’s fiendishly complex tax system.
“Until these reforms are realised, all companies with substantial undertakings in the UK should demonstrate their clear commitment to paying the profit taxes due here. Other firms, and the general public, can see through the artifice of creative accounting – and their anger is growing.”
(Image shows John Longworth, Director-General of BCC)
