My previous post ended up offputtingly lengthy (it is Saturday, after all), so here's the summary:
If we want to stop holding companies relocating from the UK to Ireland, the best and simplest solution is to exempt dividends from overseas subsidiaries from corporation tax, which is what most other European countries do. The fall in corporation tax revenues would be about £1 billion per annum (or 0.16% of all government tax receipts), which might be more than offset by the increase in other UK revenues (salaries, PAYE, office rents etc).
Saturday, 30 August 2008
Henderson and Charter relocate to Ireland (short version)
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2 comments:
Or we could cut British corporation tax rates to 12.5% as in Ireland. This is largely what stimulated Ireland's economy to grow at 7% annually for the last 18 years. This would obviously cost far more than changing a role for a very small portion of activity & the primary reason for doing it is the mass effect it would have.
If we are going to do big tax cuts, why not cut the worst taxes (VAT and Employer's NI - that between them raise twice as much as corporation tax) first?
The Irish so-called miracle is a result of EU and US subsidies, tax haven status and Euro-engendered property boom (low or negative interest rates).
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