12 August 2003
CORPORATION TAX REFORM CONSULTATION
New proposals to take forward the Government’s reform of corporation tax aimed at supporting business competitiveness, productivity and growth, while ensuring fairness for all, were launched today.
Announcing the consultation, Corporation tax reform, Paymaster General Dawn Primarolo said:
"Sustainable growth and economic stability are built on the platform of a thriving business sector. For that we need a tax system that underpins business competitiveness, and ensures fairness across all sectors of the UK economy. Today’s consultation document marks the next stage in the Government’s strategy to achieve that objective through the reform of corporation tax. "
”In 2002 the UK accounted for almost 30% of total EU inward investment. Today’s publication builds on the UK’s enviable position as an attractive location in which and from which to do business and further develops the wide-ranging proposals discussed in the August 2002 consultation document. I would urge businesses and all those with an interest in corporate tax to read and respond to the consultation.”
The consultation seeks views on proposals for taking forward reform in the three main areas set out in the August 2002 consultation document:
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Rationalisation of the way in which the schedular system taxes different types of corporate income to provide more flexibility in the way in which losses from one activity can be set off against profits arising from another;
- Changes to the tax treatment of trading and investment companies to remove outdated restrictions and facilitate group restructuring; and
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Changes to the tax treatment of capital assets to reduce distortions in the tax system.
It also addresses the reform of corporation tax in its wider international context, recognising the influences of a competitive business environment, of international agreements and of legal developments.
The detail of the proposals can be found in the consultation document, which is published on the Treasury's website, and six background notes which can be found, together with the consultation document, on the Inland Revenue's website.
Hard copies can be obtained from Inland Revenue Visitors Information Centre, G27 Ground Floor, South West Wing, Bush House, Strand, London WC2B 4RD, or by telephoning 020 7438 6533.
Responses to the consultation should be sent to:
George Gillham
Inland Revenue
Business Tax
Room 5E1
22 Kingsway
London
WC2B 6NR
Fax: 020 7438 6815
E-mail: george.gillham@ir.gsi.gov.uk.
Responses should be received by 3 November 2003.
NOTES FOR EDITORS
1. Today’s consultation document is accompanied by six background notes, which explore some of the issues in more detail and provide supplementary information.
2. The consultation document Reform of Corporation Tax was published on 5 August 2002. That document, which today’s publication takes forward, discussed the following areas for potential reform:
- the tax treatment of capital assets not covered by earlier reforms;
- rationalisation of the way in which the schedular system taxes various types of income; and
- the differences in the tax treatment of trading and investment companies.
Over 150 written responses were received, and consultation meetings were also held. A summary of responses is included in Background Note D.
3. The Budget documentation (in the Economic and Fiscal Strategy Report and Inland Revenue Press Notice 6) set out that the Government would be taking forward further consultation on the three areas of reform set out in the August 2002 document, and that the reform would be considered in its broader European and international context.
4. Media enquiries:
Inland Revenue press office: 020 7438 6692 / 6706 / 7327
Treasury press office: 020 7270 5238
5. Non-media enquiries: 020 7438 2420 / 2425