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Chancellor announces new business-government forum on tax

Chancellor announces new business-government forum on tax

HM TREASURY News Release (PN/42/04/08) issued by The Government News Network on 29 April 2008

Chancellor announces new business-government forum on tax British businesses and the Government will form a new working group to look at the long-term challenges facing the UK tax system and ensure competitiveness remains at the heart of any future reforms, the Chancellor of the Exchequer, Alistair Darling announced today.

In his speech to a Chatham House conference on "New Financial Frontiers" he set out plans for a new working group, to be chaired by Financial Secretary Jane Kennedy with business representatives.

The group will discuss ways in which the tax system can provide the long-term certainty that multinational companies need in the face of increased competitiveness and other global challenges facing both business and government.

In his speech the Chancellor said:

"We need to anticipate a growing problem for all governments - how to protect revenues in an increasingly global market place for goods and services while promoting the competitiveness of our businesses so that they can take advantage of open markets.

"Tax is one element of the strong business environment which makes the UK competitive at a global level. The UK corporation tax rate is one of the lowest in the G7.

"I am determined that we do what is necessary to remain one of the world's best places to do business - and critically to ensure that we maintain our strong and resilient economy and our position as the world's leading financial centre.

"I am therefore bringing together a group with industry representatives to discuss ways in which the tax system can provide the long-term certainty multinational companies need, considering the competitiveness and other challenges facing both businesses and government."

Notes for Editors

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3. The Financial Secretary to the Treasury, the Rt Hon Jane Kennedy MP, will chair the working group on business taxation and the challenges of globalisation.

4. Its membership will be by invitation, and consist of senior representatives of multinational companies, with up to ten members to be appointed, reflecting the diversity of the companies involved.

5. The current global economic uncertainty makes it even more important to focus on long-term challenges ahead and has reinforced how much the global economy is interconnected. The need for engagement now is clear.

6. The focus on multinationals reflects both the importance of these companies to the UK economy and the fact that many aspects of global economic change most directly affect them.

7. There is already extensive engagement on the reform of foreign profits and this group is not intended to substitute these specific discussions. But it will provide a broader frame of reference for considering the UK's longer-term strategy on tax.

Draft terms of reference and membership for working group on business taxation and the challenges of globalisation Aim:

* to discuss ways in which the business tax system can provide the long-term certainty that multinational companies need, considering competitiveness and other challenges facing both businesses and government

Membership:

* to be chaired by the Financial Secretary to the Treasury, with a senior HMT official as a deputy;

* supported by HMT officials and advisers as appropriate; and

* membership of the group to be no more than ten senior representatives of multinational companies, with the aim of providing a diverse representation.

Meetings and agendas:

* the subjects for discussion will be agreed by the group to reflect both areas where business input would be particularly valuable in developing policy responses. It will not substitute for existing consultation arrangements on specific policy areas;

* the work of the group will be supported by Treasury officials, who will supply papers;

* the timing of meetings will be agreed by the group on an ongoing basis.

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