Vince McLoughlin, Partner at Russell New, suggests more unwelcome red tape will be created, hindering growth for the lifeblood of UK economy.
As Amazon once again has its corporation tax rates thrust into the media spotlight, Vince McLoughlin Partner at Russell New – a firm of business, tax and charity advisers – has suggested that by pushing the tax rulebook to the limits, multinationals are unfairly putting UK SMEs under the same spotlight and this will undoubtedly cause further red tape and hinder growth prospects.
Corporate use of offshore subsidiaries as a tactic to legally reduce corporate tax bills has been roundly criticised by tax campaigners, with Vodafone, Starbucks and Amazon attracting widespread protests and criticism from the media and MPs throughout the past 12 months.
Vince McLoughlin comments: “With 95% of all UK businesses classed as micro-businesses, there is little doubt that UK SMEs are the lifeblood of our economy. Growing these businesses and other smaller organisations would help to transform our economic position – if just a small portion of these micro-businesses took on one employee each then unemployment figures would drop dramatically. They need all the help they can get to grow.
“The danger is that as efforts are made to crack down on the avoidance schemes practised by the multinationals, the measures used will bring forth another raft of red tape, which will not be targeted but impact on all businesses, large and small alike.
According to research by legal information provider Sweet & Maxwell, 1,466 new laws were introduced over the last year, compared with the 1,355 introduced in 2011, representing an 8 per cent increase, suggesting that David Cameron’s red-tape cutting agenda may have slowed.
Vince McLoughlin continues: “This is a worrying sign that the government’s stated aim to reduce red tape for businesses by lowering the number of new laws has taken a hit and may be running into difficulties. As more multinationals are thrust into the spotlight for tax avoidance schemes and the Government pursues its objectives of preventing such schemes, the red tape is only going to increase and thus cause more unwanted headaches for UK SMEs.”