Peers: Corporate Tax is ‘Not Working and Needs Reform’

A cross-party group of peers have urged the Treasury to explore radical alternatives to the current corporate tax.

Towards the end of July, peers insisted that the current UK corporate tax system “is not working and urgently needs reform”.

The Committee on Economic Affairs, within the House of Lords, also released a report that ultimately called for a review of tax rules. More specifically they requested  a review of the “generous” relief on interest payments, arguing that the relief has the potential to force British businesses into taking on masses of debt. The report also urged a move towards increased  transparency and a greater oversight of the system.

The report – which comes after the tax-dodging scandal surrounding the likes of Starbucks and Google broke into the public arena – also called for: new regulations for tax advisors; a requirement for big companies to publish summaries of their tax returns; and a new joint committee of the Commons and the Lords to be set up to take evidence.

Chairman of the Committee Lord MacGregor said: “There is a sense that corporation tax is voluntary for some multinationals that operate globally, while small UK-based businesses go by the book and have to pay. That brings the tax system into disrepute and loses much-needed revenue.”

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