The Corporate Tax Road Map was first published in 2010 and was widely welcomed by UK business. It clearly set out the Coalition Government’s plans for the current Parliament and gave a very clear message that competitiveness was a priority. The key changes planned for the corporate tax system were signposted, providing the certainty business wants, and there was also a commitment to consult widely and openly before new measures were introduced.
The specific proposals set out in the Road Map were introduced generally in line with original plans. Understandably the advent of the OECD base erosion and profit shifting (BEPS) project has introduced some uncertainty to the UK tax system given that it is based on a global dialogue, (for example it may result in a rewrite of our relatively recent anti-hybrid rules and a fundamental change to the deductibility of interest). And, in some cases the Government has moved faster than the overall process, especially with rapid introduction of the highly complex proposed Diverted Profits Tax from April 2015.
Therefore we recommend that, at the start of the new Parliament, an updated Corporate Tax Road Map be published. This would help to re-establish the clear sense of direction that existed in 2010 and should hopefully provide the certainty that business needs to invest further in the UK.
We also suggest a Personal Tax Roadmap be developed to give similar direction to non-business taxes.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.