Government to increase UK's "tax attractiveness"

Date: 27th January 2010

Small businesses in the UK could be among the firms to notice an increase in competition from overseas outfits following government moves to make the UK a more "attractive" base for global businesses.

Earlier today (January 27th), HM Treasury published a discussion paper which unveiled proposals to reform the way controlled foreign companies (CFCs) are taxed.

Stephen Timms, financial secretary to the treasury, said the new rules are intended to "enhance the competitiveness of the UK".

"Modernising these rules is crucially important to maintaining and enhancing the UK's attractiveness as a base for global business," he said.

"This report, drawing on our discussions with businesses, is a key step in designing a system that better recognises the way multinationals operate today, while protecting our tax base."

According to the treasury, the current CFC regulations serve to "protect the UK corporation tax base" by reducing the number of organisation who store profits in offshore accounts with lower tax demands.