From a trickle to a flood. By Simon Sweetman

Simon may be technically right but two things are at work here:

Firstly, companies operating globally need a good excuse to leave the UK and setup in countries that allow improved profits and less regulation. The other factor is that ignorance of other countries taxation regimes is bliss and perception is everything.

Were not over taxed and over regulated, are we? True or false!

Obviously business make decisions based on overall cost. No one will relocate to Iraq even if the tax rate is -1%.

Given like for like environment, then tax rate will be a factor. Any wonder why Microsoft etc are based in ROI rather than UK ?

UK is competitive for certain business but not the others. If it is a pure information based .com, they the business will be better off in IoM.

If it receives dividend from trading subsidiary worldwide, it can be very attractive to be in the UK indeed as these company take advantage of double taxation agreement and seldom pays the headline 30% in the end.

The following extract from the Small Business Service Statistical Press Release August 2006 declares that:

“There were an estimated 4.3 million business enterprises in the UK at the start of 2005, an increase of 59,000 (1.4 per cent) on the start of 2004. This estimate, and figures in this release, comprises the private sector (including public corporations and nationalised bodies) and therefore excludes Government and non-profit organisations.

Almost all of these enterprises (99.3 per cent) were small (0 to 49 employees). Only 27,000 (0.6 per cent) were medium-sized (50 to 249 employees) and 6,000 (0.1 per cent) were large (250 or more employees).”

Just 0.7 percent of medium to large enterprises employ 53.2 percent of the population and contribute 63.5 percent of turnover.

Just a small drop in medium to large enterprises has an enormous effect on the Treasuries tax and NIC revenues. All we hear from GB is that UK plc should embrace globalisation. Why is he so smug when he says this when he should be saying the opposite?

My perception is that he is fixated with aggressively collecting revenues from the 99.3 percent of enterprises that employ 46.8 percent of the population that contribute 36.4 percent of turnover. This is how he will balance the books.

Perception is so unreliable, isn't it?

I have shown the CBI's claims on the burdens on business to be wrong using statistical analysis. See http://www.taxresearch.org.uk/Blog/2006/10/17/tax-paid-by-uk-companies/

Richard Murphy
http://www.taxresearch.org.uk/blog/.

There goes a saying Lies Lies and statistics. By restricting the data set, adding caveat etc, stats can be used to show nearl any conclusion needed.

But one thing is obvious - British PLC are being taken over by overseas company left right and centre.

The Treasury should only take % of CT, wages etc that it can wisely spend. Spending billions on wars abroad is certainly not what I consider wise.

Every corporation is required to return more on capital employed as time passes. Government should be expected to do the same except that she currently employs more capital and produces less (service).