Grasping the thistle

Scotland corporate tax survey report

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Key findings

Our new discussion paper urges the Scottish Government to present the country’s businesses with a clear current and future tax implementation strategy.

We asked just under 200 senior business leaders about their expectations, hopes and concerns in the key areas of corporate tax and investment.

  • Just under two thirds (64%) were doubtful about the viability of establishing new systems in a fast, effective and cost-efficient way. Read our viewpoint.
  • More than half (54%) support lowering corporate tax rates to stimulate investment, emphasising setting sustainable, rather than significantly lower rates.
  • If a Scottish Government had the ability to change corporate tax rates in the future, just under half believe it would reduce them, with18% saying it would maintain them.
  • Respondents overwhelmingly believe a reduction in corporate tax rates would attract increased, sustained investment from international business into Scotland, but they point out that the lost tax revenue might be unsustainable unless income is recovered from other sources, or offset by spending cuts. Read our viewpoint.
  • 84% said a rate cut of between 0-7 percentage points would make them rethink their business strategy. This suggests there is no need to compete with the Irish corporate tax rate (currently 12.5% – 11.5% below the UK’s). 67% said the reduction in tax as a result of lowering corporate tax should be funded by spending cuts.
  • Two thirds felt implementation of a reduced corporate tax rate should be phased rather than immediate, with 76% saying it should be applicable to all companies, not just those in certain sectors or regions.
  • There is concern and uncertainty about the possible administrative burden of unravelling an established UK tax system. For example, the application of transfer pricing (a tax concept aimed at ensuring arm’s length prices are charged between entities to avoid manipulation where profits arise). 41% were unsure whether the issues associated with applying transfer pricing would be outweighed by the benefits of a separate corporate tax rate. Read our viewpoint .