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UK: Corporate tax set for overhaul

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The UK's Coalition Government has launched a new agency to simplify corporate tax rules in a move designed to silence dissent within some of the country's leading companies, including Diageo.

Chancellor George Osborne today (20 July) launched the Office for Tax Simplification and declared that "Britain is open for business".

His aim, as set out by the Conservative Party's pre-election manifesto, is to prevent UK-listed companies from moving their headquarters overseas, as well as to attract more foreign investment and boost small-to-medium businesses.

"A decade of meddling and intervening has made the tax affairs of millions of families and businesses across the UK extremely complicated," said Osborne. "We need to sort out this mess."

The OTS will "develop a framework that puts predictability and stability first", according to the Government.

The Chancellor has already revealed plans to reduce the corporate tax burden on UK-listed companies and also to review the way firms are taxed on profits made by overseas assets and subsidiaries.

The Government's move follows speculation that some FTSE100 companies, including Diageo, might be tempted to move their headquarters out of the UK.

Diageo CEO Paul Walsh warned earlier this year that the UK tax system was "uncompetitive" for multinational firms.

Today's announcement will be further encouragement to Walsh and other CEOs in the FTSE100.

SABMiller CEO Graham Mackay said in May this year that he was "encouraged" by the new Government's attitude to corporate tax.


Sectors: Legislation

Companies: Diageo, SABMiller

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