There is inevitably a high degree of scepticism about the outcome from global summits and the forthcoming G8 Summit, under the UK’s Presidency, at Loch Erne in Northern Ireland is no exception.
The prime minister has listed three priorities for the Summit which are intended to underpin a pro-business and pro-development agenda, focussing upon advancing trade, ensuring tax compliance and promoting greater transparency. I have commented below principally upon the theme of ensuring tax compliance but this inevitably impacts upon the other two priorities on the PM’s list.
It is good to hear that David Cameron professes to be “proud to be a low-tax, free-enterprise politician” and most authentic commentators would accept that “low taxes are only sustainable if what is owed is actually paid”. Unwisely, however, the prime minister has chosen to pick up the well publicised theme in Parliament and the press surrounding the taxation position of multinational businesses and the perceived abuses. He has also attempted to differentiate the taxation compliance of small businesses from their multinational “rivals”. I have been a partner in three accounting firms over almost thirty years and I can honestly state that I cannot identify any general difference in the attitudes of global businesses, owner managed domestic businesses and individuals towards the payment of corporation tax and the propensity for planning to reduce such liabilities.
Stephen Herring is senior tax partner at BDO
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