The Confederation of British Industry has retaliated to the accusations of critics that large businesses indulge in tax avoidance using methods which are underhand. The CBI has pointed out that “black box” tax schemes cannot be justified, although they do offer a legitimate way to avoid tax.
The business group was keen to defend members of the organisation, stating that the companies paid the tax due and followed regulation. A report produced by the CBI, ‘Tax and British Business – Making the Case’, demonstrates how UK businesses minimise their tax bill legitimately, without having to use complex schemes to avoid tax. The organisation also pointed out that taking into consideration tax reliefs and tax breaks, businesses in the UK pay far more tax than businesses in the US, Germany and France.
Campaign groups like UK Uncut have called for action to be taken against companies who use tax avoidance schemes but John Cridland, the director general of CBI argued that most companies play by the rules and most of the tax receipts are due to businesses. The argument seems likely to rage on, with the Chancellor set to lower the rate of Corporation Tax to 22 percent. Cridland said:
“Business should not engage in abusive tax arrangements. However, in running their normal day-to-day activities, as well as in commercial transactions large and small, businesses need to manage their tax affairs as a key part in operating their businesses.”
A small business accountant offers advice for claiming tax reliefs like on capital purchases and research and development, minimising tax bills legitimately.
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