Business leaders demand tax transparency from political parties

Date 22.10.09 For immediate release Subject BDO calls for open debate on tax policy Business leaders demand tax transparency from political parties Only 3 per cent of financial decision makers in the UK believe that the main political parties are transparent enough over their tax policies. 85 per cent state that they would be more likely to vote for a party that showed greater clarity, according to a new survey published today by accountants and business advisers BDO LLP. Responses given by local businesses were reflective of the national survey results. The lack of transparency has left an overwhelming 93 per cent of respondents fearing that it is now inevitable that tax rises will affect their business after the general election, with 97 per cent expecting tax rises to affect them personally. Analysis of the political party conferences by BDO LLP shows that none of the proposals made by the parties contained potential tax rises that could make a significant impact upon the fiscal deficit. For example, Shadow Chancellor George Osborne MP proposed that a Conservative government would introduce national insurance reductions for new businesses but he had few concrete proposals for tax rises, while Labour’s Alistair Darling had little to add to the 50 per cent top income tax rate, announced in the 2009 Budget, which will raise less than £2 billion and is already factored into Treasury projections. Meanwhile the £1.5 billion projected proceeds of Vince Cable’s proposal for a “mansion tax” levied at 0.5 per cent of the value of homes over £1 million that would be felt most heavily in the South, are more than offset by Liberal Democrat promises to take low paid workers out of the income tax net. An updated report from BDO LLP – Time to Break the Silence – considers that a prudent estimate suggests that an additional £25 billion a year tax rise may be needed in the medium term as a contribution to rebuilding the national finances. Stuart Lisle, Tax Partner for BDO LLP in the South commented: “It may come as little surprise to see that almost every local business is expecting to be hit by tax rises next year, but it is disappointing to see that even after conference season, we are still in the dark over the parties tax policies. Our local business and entrepreneurs who are trying to drive wealth creation in the region are on the operating table and the political parties’ are holding the scalpel, but we don’t know what the level of pain will be, or where exactly it is going to hurt. “Business leaders are clearly demanding a proper debate on tax rises as well as spending cuts. All parties should actively, openly and willingly engage with this debate now, and not merely in the febrile atmosphere within a three week general election campaign.” - Ends – Note to editors BDO LLP operates across the UK with some 3,000 partners and staff. BDO LLP is a UK limited liability partnership and a UK Member Firm of BDO International. BDO in Northern Ireland is a separate partnership operating under a licence agreement. BDO International is a world-wide network of public accounting firms, called BDO Member Firms. Each BDO Member Firm is an independent legal entity world-wide and no BDO Member Firm is responsible for the acts and omissions of another member. The network is coordinated by BDO Global Coordination B.V., incorporated in the Netherlands with its statutory seat in Eindhoven (trade register registration number 33205251) and with an office at Boulevard de la Woluwe 60, 1200 Brussels, Belgium, where the International Executive Office is located. The combined fee income of all the BDO Member Firms was $5.14 billion in 2008. The global network has 1,095 offices in 110 countries and more than 44,000 partners and staff provide business advisory services throughout the world. BDO LLP and BDO Northern Ireland are both separately authorised and regulated by the Financial Services Authority to conduct investment business. BDO is the brand name for the BDO International network and for each of the BDO Member Firms. Methodology BDO surveyed 148 finance directors and other key business executives, in September 2009 Contacts Fergus Campbell Blue Rubicon Matthew Longbottom BDO LLP Tel: 020 7260 2700 Mob: 07899 908483 fergus.campbell@bluerubicon.com Tel: 020 7893 2717 matthew.longbottom@bdo.co.uk