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Press watch: 50% tax rate; ‘supplicant’ governments; reinsurer returns to UK

printer Mail

‘Coalition tensions over when to scrap the 50p income tax rate were publicly exposed as Danny Alexander said that advocates of the move were “living in cloud cuckoo land”. Raising the income tax threshold further to £10,000 remained the coalition’s main priority, the Liberal Democrat [Chief Secretary to the Treasury] insisted ... Behind the scenes, however, both sides of the coalition agree that carrying out the move when the spending cuts are still biting would send out the wrong political signal.’

Jim Pickard, Financial Times, 31 July 2011

‘The modern globalised corporation is not a state within a state so much as a power above and beyond the state ... The ability to raise taxes to provide services is a core function of democratic government, yet governments have been reduced to supplicants, cutting their tax rates further and further to woo corporates.’

Felicity Lawrence, The Guardian, 29 July 2011 

‘Lancashire, the London-listed Bermudan reinsurer, has handed the UK government a much-needed dose of positive press by becoming the first company to move its tax residence back on shore in response to changes in the last Budget. George Osborne announced changes to the controlled foreign companies regime in March, saying the move was designed to reverse the trend of companies leaving the UK. WPP, the global advertising group, said the next day that it would return to the UK.’

Paul J Davies, Financial Times, 27 July 2011