HISTORIC PRESS RELEASE : Corporation Tax Reform consultation [August 2003]

The press release issued by HM Treasury on 12 August 2003.

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:

• 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• Changes to the tax treatment of trading and investment companies to remove outdated restrictions and facilitate group restructuring; and
• 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.