Newspaper article The Evening Standard (London, England)

Society Is Going to Bite Back at the Fat Cats

Newspaper article The Evening Standard (London, England)

Society Is Going to Bite Back at the Fat Cats

Article excerpt

Byline: Anthony Hilton city comment

THE Chancellor announced in his Autumn Statement last week that he was determined to find a way to tax companies like Google and Amazon which did a huge amount of business in the UK but seemed to pay very little corporation tax the tax levied on profits. The Government yesterday published details of how it plans to tax such firms.

Reaction from business was interesting. Employers' organisation the CBI, for example the representative, it says, of 190,000 companies was lukewarm. It conceded that the international tax rules needed updating but said that there was already an OECD process under way to do this. Its verdict was that "it is unfortunate that the UK has decided to go it alone which will be a real concern to business". Adjusting for the mild-mannered way in which these statements are traditionally phrased, that amounts to a powerful rebuke.

But that view might come as a surprise to most businesses, which seem more likely to be cheering the initiative from the rafters. For example, this week the Chartered Institute of Management (CIM) published some predictions and wish-lists for the New Year. What was most striking was how few of the concerns of management that focused on the need to improve skills and productivity, and put in place serious training for young people, are ever treated seriously by Government. It pays lip service to the idea when challenged, then slashes the budget of the Department for Business Innovation & Skills, which is the one body capable of implementing any such scheme.

But one area where the views of CIM managers did overlap with government policy was a desire to see much more fairness and transparency on issues like pay and tax.

John Longworth, director-general of the British Chambers of Commerce, went significantly further in a letter to the Financial Times at the weekend, taking totally the opposite line to the CBI. He said: "Many in British business will in fact cheer George Osborne's unilateral attempt to level the tax playing field.

"For far too long, the highest rate of tax on profits has been aid by companies that are committed to the UK, whether large or small. These businesses are angered by the small number of their competitors who embark on expensive and complex tax avoidance procedures designed to circumvent the spirit, if not the letter of our tax laws," he wrote.

"Many CEOs and managing directors that I meet rail against what they see as an attitude of impunity among a privileged few that distorts competition, deprives the UK of badly needed tax revenues and creates reputational issues for business."

He then made a point that every board should consider: "Since corporations only prosper with the consent of the societies in which they operate, tackling this issue before it becomes a moral crusade is crucial. …

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