TAXATION - HARD CHOICES

The Government's moral position on corporate
taxation is changing, in order to accommodate
its inability to control the inexorable growth
in public spending. The first duty of the board
of any publicly-quoted company is,within
the law, to maximise returns for shareholders.

However, this is now being compromised
by the inference that tax liability should be
determined not by HMRC, but by public
opinion, based on what is considered fair.
This could indicate a move towards corporate
taxes being determined by plebiscite with
pedictable consequences. It could result
in British companies paying the equivalent of
corporation tax on the same profit in multiple
oversas jurisdictions. 

Much has been made of the role of financial
advisers at recent Parliamentary Select
Committee hearings. The Big Four UK
accountants operate, as is stated, within the
existing law, in assisting their clients to
maximise shareholder value.

In order to meet this requirement, they
advise companies on navigating the
the quagmire that is UK tax regulation.
Tolley's Tax Guide reveals that UK-based,
multi-nationals have had to comply with an
extra 11,000 pages of tax law since 1997.

This includes an additional 1100 pages of
regulations since the Coalition came to
Office in 2010. The position becomes even
more complicated with the EU courts'
increasing interpretation of UK legislation
relating to corporate tax liability.

.