Multinationals square up for own ‘income shifting’ protest

Posted by AccountingWEB PM | on Tue, 06/05/2008 - 12:29 2478 1 comment

Last year the treasury announced a consultation on the taxation of foreign profits of companies. One of the main change being proposed is that dividends paid to UK companies by their foreign operating companies would be exempt from UK tax. Whilst many commentators welcomed the proposals, suggesting that the UK would consequently become a more attractive place to do business, others warned about the small print, namely the tax implications of “mobile income”.

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Comment from a tired old cynic

Anonymous | Tue, 06/05/2008 - 14:59 | Permalink

It seems fairly clear to me that there are a few multinationals that will be satisfied only when there is no tax at all, so why don’t we go the whole hog and abolish corporation tax in the UK completely - would that pacify them? It might bring back the Shires of this world to the UK, so has at least that to commend it.

Or perhaps we should add further sweeteners - for example:

Paying companies much higher tax credits in cash for employment, training etc?

Exemption from business rates?

Free public transport for workers?

Free heath care for workers? (oh sorry, we've got that already)

Free food for workers?

Free Sky TV for workers?

Anything else they might like - perhaps exemption from UK income tax of the esteeemed members of their board of directors (who are heartily most welcome in, or to remain in, the UK)?

Tragic thing is I expect that in the unlikely event the inept cretins in charge of finance at New Labour read this, these sorts of things could become serious policy options.