Partner Article

Business reliefs and incentives in reality

Melanie Malsbury, tax partner at PwC in Newcastle, talks about the realities of reliefs and incentives stemming from the Autumn Statement.

The Chancellor started by saying ‘Britain is on the right track and to turn back now would be a disaster.’ He went on to reaffirm the need to keep the UK internationally competitive. That signals sustained support for the “UK Open for Business” strategy and a consistency that will be welcome to business.

If we want to remain attractive to businesses thinking of locating here, we have to help them believe that this strategy is for the long term. The Government’s policy means that there are reliefs and incentives that have been brought in specifically to attract business and the whole point of doing so is to increase jobs, create intellectual property and collect tax revenues. The reality is that means corporate taxes paid by those companies will be lower than they would be if the reliefs didn’t exist. But the total tax contribution (including payroll taxes, business rates and VAT) will be significantly higher than if they chose a different location.

All of that is about tax policy. That drives the tax rules and then compliance with those rules - and collection of the taxes due - is the responsibility of businesses and HMRC respectively.

This was posted in Bdaily's Members' News section by PwC .