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Not just the age-old problem of Corporation Tax rates
I'm not sure if I am alone in this, but it is no longer just a case of businesses complaining about the absolute or marginal corporation tax rates. This has been the refrain of business since Adam was a lad - Adam Smith of course.
The main difficulty that businesses (of any size) face with HMRC is uncertainty. The tax code has become cumbersome and rife with contradictions and holes. These CAN work for businesses, but mostly they work AGAINST businesses. To highlight a particular gripe would be the 'Anti-avoidance' clauses that are tagged onto every specific section. There is also the uncertainty caused by continual changes being made across the board and across the spectrum of taxes. Under the chancellorship of Gordon Brown this went from the sublime to the ridiculous, with major changes being delivered with every budget.
I appreciate the difficulties of the current coalition government. They have been left with a massive deficit to control while having tax revenues that can be described as at best 'worrying' (and at worst 'frightening'). What is needed at the present time is a massive simplification of the tax code, however the possibility of such simplification leading to lower government revenues is not something they can deal with at the present time.
The best the government can do is to eliminate various taxes which are high in beauracracy, but low in revenue, in the hope that this will convince some of those businesses that are 'putting on their hat and coat' (HSBC et al) to wait to see what happens. This might preserve the existing tax revenues if nothing else.
The biggest uncertainty to my mind is the erratic, over-zealous and deliberately harmful attitude of the current generation of Tax Inspectors. The merger with HM Customs seems to have infected the 'Revenue' side of the organization with the attitude that those 'customers' that aren't evading are thinking about it. This ABSOLUTELY HAS TO STOP.
The majority of business in the UK are interested in doing whatever it is that increases sales. They pay taxes, but provided such taxes are reasonable and predictable, it's just a matter of ensuring there is sufficient cash retained in the business to pay the tax.
The problem comes when an Inspector of Taxes turns up on the premises with his new 'Customs' powers on a fishing trip. This can (and often does) bring the whole business grinding to a halt. Even if (after a thorough investigation) the business is given a clean bill of health the damage has already been done as the disruption has a far bigger impact on the business than the tax assessment in most cases.
We need to get back to a situation where investigations are done proportionately, however given the relative inexperience of most of the current generation of Inspectors (except in the techniques of interogation and tax revenue maximization), I fear this is nothing more than a pipe dream or a rose tinted view of how the Inland Revenue used to operate prior to 1996 and the introduction of self assessment.
Regardless of anything else businesses CANNOT TRUST HMRC because of the massive and continual incompetence at seemingly every level, from the inability to answer telephones; read (never mind respond to) letters from both agents and taxpayers, etc - the list is endless.
If the coalition government wants private sector business to lead the recovery then they need to be able to do their job without fear or interference from HMRC. Equally, HMRC needs to get back to the job of collecting tax revenues from those who should be paying but aren't rather than unneccesarily impeading genuine businesses.
yet another non-story
If you ask them would they consider relocating because of tax, they say yes. So you create a story.