Chris Sanger, EY’s Head of Tax Policy, comments on the Chancellor’s Budget:
“The government has long said that tax competitiveness includes the tax rate, the tax base, tax policy making and the strength of it tax administration. So, with an increase in the tax rate for large businesses, it is perhaps not surprising that the Government has signalled a review of how it interacts with its largest taxpayers. Building on HMRC’s new ten year strategy and its digital aspirations, the tax authority is now going to consult on how it can improve tax certainty.
“This move is particularly important at a time of rising tax rates when other countries may look at first blush as a more attractive proposition than the UK. By reducing tax administration and providing certainty to investors, the government can go some way to tempering the impact of the pending tax rise. The Chancellor will be hoping that greater certainty of tax treatment, even at a higher rate, will ensure that the UK recovers its crown as the country in Europe with the largest share of foreign direct investment.”