Cameron says no thanks to EU corporate tax base proposal

Accountants will no doubt be interested to learn that David Cameron last week signalled his outright opposition to the European Union’s plan to build a common corporate tax base.

The Prime Minister told MPs that it was important for the UK to retain its competitive tax rates and not to allow the EU power over the country’s taxation.

Mr Cameron was speaking in answer to a question from James Clappison, a fellow Tory MP. The PM went on to point out that he did not agree with raising more money for the EU through taxation, nor did he want to see reduced tax competition within the European Community.

Meanwhile, Scottish First Minister, Alex Salmond, has said that he wants to control corporation tax in Scotland. Michael Moore, the Scottish Secretary, says it is unclear whether Salmond simply wants a separate business tax in Scotland or has a more detailed case for additional tax devolution.

Currently, government plans are limited to giving Scotland control over 10% of the income tax rate north of the border. The Scottish parliament can opt to lower or raise the rates by up to 10p in every pound. This legislation falls under the Scotland Bill, which should soon complete its passage through the House of Commons before facing consideration in the House of Lords.

Mr Salmond has said his victory gives more legitimacy to his demand for more tax devolution. He also wants to control the duties on alcohol and the revenue from the Scottish Crown Estates.

In the meantime, Northern Ireland wants to control its own corporation tax so it can be reduced in line with the lower rate in Eire.

Tax accountants could find life gets more complicated if the individual nations within the UK have different tax regimes!

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