Tax burden for UK companies increases
At a time when the UK economy is just exiting one of the most difficult periods in its history it has been revealed that the average tax rate on FT-SE 100 companies increased by 9% to 41.6% during the 2008/09 tax year. While in boom times the economy may well have been able to support such an increase in tax liabilities, when you consider the economy has been struggling for two years and companies have been scrambling to repair their balance sheets, these tax rises have perhaps come at the worst time possible.
This is part of the reason why a number of prominent UK companies have floated the idea of moving overseas to avoid what they see as an all-encompassing and ever more unfair tax regime in the UK. While there are few countries in the world currently able to offer low rate tax environments this will not be the case forever and there is every chance that prominent companies in the UK will eventually move overseas.
So far the government and the Treasury have been fairly dismissive of these suggestions but the truth is, the more "unfair" the tax regime becomes the less future investment the UK will attract.
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