What can Dorset and Hampshire limited companies learn from the corporation tax scandals in the press? Some of the scandals at the end of 2014 meant many accountants were getting phone calls from worried clients; Google, Amazon and Starbucks are regularly named and shamed in the press for their tax activities.
And this week, the FT quotes an Oxford university analysis which concludes George Osbourne’s ambitious corporation tax reforms have had little effect, pushing the UK up by just two places to fifth in a league table of effective tax rates, the G20.
But The Independent’s James Moore points out that FTSE 100 and other big firms provided a record £80bn in tax revenues during the year to the end of March, up 2.1 per cent on the previous year. Every UK limited company is subject to corporation tax on their profits.
Limited companies that are non-UK based that can still be expected to pay corporation tax if the central control and management of the company is carried out in this country.
Corporation tax is also set to be debated as a hot topic in the run-up to this year’s Election. Ed Miliband’s plans to increase corporation tax could cost more than 90,000 jobs over the course of the next Parliament, according to the Centre for Policy Studies. So with both parties angling for your clients’ votes in the coming months, be prepared to answer questions both on past and proposed policy. Keep your client informed and that will give them confidence in their finances – and in you.