Tax: a force for stability and investment

For the UK economy to thrive and for business to play its role in this success, we need a tax system that provides certainty, stability and confidence in the rule of law. Deloitte’s role in tax comprises our work with government to put forward practical policy suggestions, cooperating with regulators on projects aimed at building trust in the tax system and helping clients navigate and comply with an increasingly complex regulatory environment.

Attracting investment: new UK corporate tax regime

The statutory rate of corporation tax will be the joint lowest in the G20 when it drops to 20 percent from April 2015 and there have been a range of tax incentives introduced to support scientific and technical expertise, promoting innovation and entrepreneurship. We have worked closely with the government to develop the practical application of several of these incentive schemes, such as the new R&D expenditure credit and the Patent Box legislation, introduced to help maintain the UK’s position as a world leader in patented technologies.

Through helping our clients realise the benefit of such incentive schemes we can help retain the UK as a centre for intellectual property investment, in turn supporting business growth and competitiveness.

Case study

One Honda in Europe

Deloitte marshalled the combined experience of 15 tax and legal teams across the European member firms, placing Honda Europe’s UK HQ at the heart of a leaner, more agile and more focused European sales business.

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This evolving tax landscape has attracted companies seeking to base their headquarters in the UK and such a positive trend should provide a great boost to the government’s efforts to rebalance the economy away from financial services. Several Japanese groups have established or are expanding regional headquarters in the UK and we held a high profile event in Japan for the former Exchequer Secretary to the Treasury David Gauke MP to discuss the attractions of the UK.

Tax transparency: BEPS

Another major theme in tax this year has been the Base Erosion and Profit Shifting (BEPS) project, which was introduced amid concerns over tax planning strategies by multinationals to exploit gaps in tax rules. Deloitte UK is fully engaged with, and is contributing positively to, the BEPS project and we are focused on making new international tax rules workable for tax authorities and for business.

The UK is one of the leaders of the BEPS project both politically and technically and our partners and directors have invested a significant amount of time in participating at all the OECD Open Days and at discussion meetings to contribute our knowledge and experience to the entire process. Our client conferences on BEPS in London, where chair of the Commons Public Accounts Committee Margaret Hodge MP was a keynote speaker, were sold out and we ran similar events at many regional offices.

Building public trust: tax compliance

Tax compliance has been under much scrutiny and there is a lack of public trust in the value created by business – including the application of the tax system to multinationals and wealthy individuals. We are supporting our clients by helping develop their tax policies to take into account the wide range of interests of all their stakeholders. Our tax compliance work is critical in helping clients navigate an increasingly complex terrain, providing transparency and certainty for their business and encouraging better communications in relation to their tax affairs.

Case study

Tax Compliance: bringing confidence to business

Each year we support firms and their employees prepare and file over 20,000 corporate, VAT and personal tax returns in the UK.

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Future changes to national and international tax policies will have an impact on UK growth and competitiveness. We are gathering views from UK business leaders to put forward practical policy suggestions to help facilitate the changes that support the success of UK business, while at the same time bring increased transparency and confidence to the system.