Friday, June 18, 2010

Anticipating the Emergency Budget - Corporate Tax Directors

I spent last night at a private dinner discussing the forthcoming 'emergency' Budget with a number of Corporate Tax Directors.
Their hopes and fears can be summarised as follows:

Fears expressed about the content or consequence of Budget announcements:
- an immediate increase in the standard rate of VAT;
- an extension of the proposed bank levy;
- international companies expanding elsewhere in preference to UK;
- further increases in personal taxes that lead to a brain drain;
- restriction to basic rate tax relief for personal pension contributions;
- property companies being picked on due to a perception that they are wealthy and don't employ many people;
- a big hike in VAT over time with stepped interim increases;
- bringing forward the dates on which CT quarterly instalments are due, so as to create a windfall gain for the Treasury;

The following hopes were shared as regards the Budget:
- evidence of a coherent strategy and framework for corporation tax (CT);
- reduction in the rate of CT;
- more competitive CFC regime;
- evidence of joined-up thinking;
- a more internationally competitive corporate tax system;
- dropping plans to further reform the taxation of non-doms;
- a further con doc prior to introduction of a GAAR. (It was noted that in Germany companies have to pay €90,000 for the equivalent of Revenue clearances); and
- the deferral of any VAT increase until at least 1 October;


  1. Certainly anticipating a hefty VAT rise here. Infact, being slightly pessimistic, I'm expecting a budget which will give (small) business yet another bash on the head.. ;)

  2. I am often intrigued when corporate tax directors express opinions about the taxation of non domiciled individuals and other personal tax issues.

    Certainly they can have a personal opinion, but why is this relevant in their professional capacity?