I subscribe to PwC’s tax news alert, more out of curiosity these days, especially as Richard Murphy is doing such a sterling job in keeping tax avoiders honest. This week’s alert deserves special mention:
Various factors continue to add to speculation that we will not see a detailed consultation document on foreign profits this summer. While we eagerly await news from the Chancellor’s new tax forum which has just met, in a short video Peter Maybrey, PwC tax partner, looks at the changing environment and considers what clients should be doing now. Click here to view the video
In a related article, we look at some of the information to which Peter refers, including reports from the SAID business school, CBI and City of London: click here.
The video is behind a login wall but the key part is where Maybrey says: “I think it is critical for clients if you will to keep pushing the competitiveness agenda. I think there are important points to be made and Treasury has made significant progress in accepting some of those but I think there is plenty more work to do in that space.”
Whichever way you choose to read Maybrey’s remarks, it seems to me that PwC along with the other Big Four firms are straying far too much into political territory, using bogus arguments in their efforts to scare government into believing that UK competitiveness is dependent, at least in part, on a lax tax regime.
The first point to make is the glaringly obvious one that in the real economy the UK does not compete on tax. Companies don’t leave the UK as such when they go for what they claim are tax reasons. The evidence is that they are moving HQs and related finance and intellectual property functions out of the UK and into the unreal economies of those tax havens called Jersey and Ireland. But they stay firmly in the real UK economy with regard to selling, manufacturing, having people on the ground, doing R & D and so on.
Of course when you have a regime that favours artificialty, then there really is only one winner. The fee earner who dreams up the scheme.
