The FT reports this morning that:
The UK has lost its top slot in a league table of multinational companies' favourite tax regimes, in spite of George Osborne's flagship policy of cutting taxes to attract business to Britain.
The UK's popularity increased slightly but it was leapfrogged by Ireland, which is expected to be less affected than some rival countries by the international crackdown on tax avoidance, according to a survey by KPMG, professional services group.
All of which only proves the sheer futility of engaging in tax competition. Any supposed 'victory' is short lived and the cost high. I have previously suggested that Osborne's policy on this issue may have cost the IK £10 billion a year.
And who fuels all this? The Big 4, of course, on behalf of their largest clients, who, with their owners, are the only net winners from this despite the nonsense that is said by some economists to the contrary (after all, why would they promote this competition unless they were the winners from it?)
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This is a slightly different point . We hear a lot about the need to attract foreign capital. I can appreciate that receiving foreign money in our banks helps the exchange rate and provides employment. Honda and Nissan have set up here and contribute to our exports. I can understand we may need to import skills or specialised machinery but capital? Surely we can provide our own capital for investment?
We could provide our own capital for investment
But we would rather speculate
Meanwhile over in the Isle of Man the Treasury Minister defended the island´s “tax cap”scheme, but was unable to given details of the wealth and income of those electing to take advantage of this “scheme” although it was known that just 58 wealthy residents had elected for the £120,000 tax cap in the current financial year. This compared to a peak of 95 individuals who benefited from the tax cap 2007-08.
The Isle of Man government´s tax cap policy is intended to lure the super-rich to the Island, yet only 17 people have moved there during its eight year existence… perhaps not surprising as to qualify for the scheme one has to provide full details of total wealth and income – although apparently these details are not made available to the Treasury Minister…
One courageous member of the government said “We are taxing the wealthiest living here less than they used to pay and should pay. Exempting 58 tax cappers from the pain of rebalancing is impossible to justify, especially in its context of stealth taxation of the poorer. Such a tax policy is unfair and is not working.”
Signs of revolution on the wealthy Isle of Man?
Don’t hold your breath!
http://www.iomtoday.co.im/news/isle-of-man-news/super-rich-wouldn-t-mind-paying-more-tax-1-6977725
Thanks
Yes speculating with other peoples money is great fun. If you make the right guess you get a great big bonus and if you get it wrong the taxpayer bails you out.
Yes winners all-round with the extra bonus that if based in some seedy “offshore centre” where”regulation” is(deliberately) feeble scams can be operated without the inconvenience of prosecution …
And then it is the victims rather than the taxpayers who loses his home!
“All of which only proves the sheer futility of engaging in tax competition.”
Really? Does it?
According to the article, Ireland’s popularity has risen due to political commitment to keep its tax rates low while uncertainty over future UK tax policy (with an election imminent) has resulted in a relative decline, although it is still a much more popular destination than in previous years.
How you interpret that as proof that competitive tax rates don’t work is beyond me.
I seem to recall you were against even Labour’s reductions in corporate tax from 30%. You really think companies would be clammering to come here if a increase back to that level were announced?
I think the cuts in rate have created no real benefit to the UK but have cost is billions a year in lost revenue that has caused considerable harm
When will you learn that a brass plate and 3 people is not a company move?
With over 75,000 companies registered in the Cayman Islands alone that´s a lot of brass name plates to try and talk to …
But get to “talk” is something you can never do …
And if you ever did – be careful! Secrecy is enforceable.