This new report – drawing on 20 interviews with tax directors at large businesses with UK operations – has found that large companies want a global simplification of the current corporate tax regime. This aligns strongly with President Biden’s proposals for a global minimum corporation tax rate, which would provide an opportunity to reduce international tax competition, which the research finds is a great source of complexity and unpredictability for businesses. The research also finds that many big businesses are largely accepting of higher corporation tax rates.
Biden’s proposals for a global minimum corporation tax rate provide a much-needed opportunity to overhaul the global tax system. We are calling on the UK Government to back the proposals at the upcoming G7 summit, and take a lead on setting out global tax standards.
The UK Government should build on Biden’s proposals and play a leading role on global tax reform, helping to reaffirm Britain’s position on the world stage post-Brexit. As well as delivering simplicity and predictability for businesses, a new corporate tax deal would allow the UK to raise more tax revenue – vital for ‘building back better’ after the pandemic.
The report is recommending that the Government:
- Supports Biden’s proposals for reform of the international corporate tax system and takes an international lead in setting out new global tax standards.
- Works with other countries and moves towards a tax regime with higher than existing corporate tax rates.
- Works with other countries to reduce and standardise reliefs.
Ben Glover, Deputy Research Director at Demos and co-author of Race to the Top, said:
“Building back better will require individuals and businesses to pay more tax. President Biden’s proposals offer a once in a generation opportunity to effectively raise taxes while making the international tax regime simpler and more predictable.
“Despite the government refusing to back Biden’s proposals so far, our research shows that this is what big businesses in Britain want: a simpler, more predictable tax system. As the G7 Finance meeting gets underway, the Government should use this opportunity to listen to business and join the US in pushing for a global shake-up of the tax regime.”