Britain to mull corporation tax change in new year
A new cross-party group of British MPs and peers is to examine Britain's tax system — and will consider the abolition of corporation tax.
The group, which will start its deliberations in the new year, will quiz government ministers and business leaders in public.
The all-party group on responsible taxation aims to keep up pressure on ministers to ensure global corporations and others pay their fair share to tax.
Its first order of business will be how to respond to recommendations by the G20 group of major nations on how to crack down on corporate tax avoidance.
Google came under fire last year for funnelling cash to Bermuda after the firm revealed nearly $12 billion had been sent to the Island over a period of years to escape paying tax on its profits.
Britain's Guardian newspaper said the new group, amid evidence that the current tax on profits is unfair, would look a whether that should be replaced by a new tax on location of activity and sales.
Corporation tax, which does not exist in Bermuda, is levied on a firm's profits, but there have been concerns in recent years that global companies can move profits to low tax jurisdictions by making huge royalty payments to different arms of their international network.
The new group will be headed by veteran Labour MP Margaret Hodge who, while she was chairman of the Westminster public accounts committee, attacked the use of complex tax arrangements by major corporations using offshore jurisdictions to minimise tax bills.
She said: “Who pays tax and how much they pay has moved from being an obscure issue only discussed by tax professionals to one of huge public concern which is of interest to everybody.
“We want to stimulate an open debate on the challenges and reforms needed to restore and maintain confidence in the fairness of our tax system.
“Raising the tough questions and breaking through the technical jargon, which in the past has created a veil of secrecy, is just what parliament should do.
Labour peer Lord Wood will be vice-chairman of the committee. He said: “There is now strong public support for making sure that business pays its fair share of tax and pays it in the countries where they make their money.
“At the moment it is clear that this is not happening in a consistent way.
“This cross-party group of parliamentarians is determined to press the government to demand greater transparency, ensure fairness and take steps to minimise avoidance.
“We want to engage and hear from the public.”