Tax Policy Development - Ernst & Young - United Kingdom

Unlike a traditional lobbying service, Ernst & Young policy development involves working with our clients to develop technical policy options in a form that is used inside Government today – covering economic issues, tax legislative concerns and fiscal costings. This ensures that the proposals can be implemented with the minimum of delay, that the concerns of Government policy-makers are addressed and that such proposals have the maximum chance of adoption.

Governments are rightly sceptical of companies requesting special treatment for themselves and undertaking ‘special pleading’ for ‘single company issues’. As a result, not all situations will be appropriate to this approach. However, what at first glance might seem to be a unique situation can be a market issue which currently only one business is facing.

Situations that lend themselves to this approach include ones where:

• a commercial decision is being distorted by the tax system
• a commercial decision is being frustrated by the tax system
• the tax system provides an incentive to act in a way contrary to other Government policy, or
• tax is the most appropriate policy instrument to affect a commercial decision.

Tax policy development offers the company a chance to create a new environment in which it can achieve its objective. By working with the Government to obtain policy change, the company is able to get certainty as to how it will be taxed and avoid risks related to other options, such as tax-related structuring.

In an era where the Government is focusing on actively identifying and countering tax avoidance, and where there has been considerable media coverage on particular ‘tax avoiders’, policy development offers a low risk alternative.