In response to the CBI’s leader urging the Government to flip business taxation on its head, Charlotte Sallabank, tax partner at Katten Muchin Rosenman LLP commented:
“The Government seems to be hoping to increase the tax take overall through increased tax rates whilst stimulating investment through reliefs rather than through low headline tax rates. But of course to be eligible for investment reliefs requires satisfying the necessary conditions which are often very detailed and ongoing. So the relief whilst sounding attractive may not be particularly easy for the taxpayer to obtain in the first place, and then hard to maintain eligibility for. Tax reliefs and incentives usually come with specific anti avoidance provisions, such as a mini GAAR, which can lead to uncertainty – where is the line in the sand between acceptable structuring to fall within the relief and unacceptable tax avoidance by taking contrived steps to satisfy the necessary criteria? Low tax rates, however, are available to all but the Government is setting great store, it seems, by its freeports legislation as a way to attract investment into the UK.”
