It is clear that multinational companies, many of which are reaping the benefits of “tax jurisdiction shopping”, have an unfair advantage over domestic SMEs in terms of reducing their business outlay and therefore the cost of delivering their products or services.

The news that the EU will now look for these multinationals to disclose the locations in which they pay tax and the amount paid is laudable, but will SMEs actually benefit? How will any additional tax revenue be applied, if indeed such funds are acquired?

The majority of employment in the UK is accounted for by SMEs and the economy simply cannot function unless this sector is successful. The costs of doing business continue to increase in most areas of the UK, with the imposition of increased employment costs and the administration fees involved in dealing with “red tape”. In addition to this, the disproportionately high cost of property and rates in some areas further exacerbates the problem.

Should the Government not be looking at encouraging growth of the SME sectors as well as tightening up on the bigger players? It would be refreshing to hear of the government applying these additional tax revenues to reduce the burden on SMEs… but I shall not hold my breath.

Mark Phillips

Partner

 

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