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The Chartered Institute of Taxation (CIOT) and the Institute of Chartered Accountants in England and Wales (ICAEW) have joined together in an attempt to expand focus on business taxation.
In a letter to the financial secretary to the Treasury, Jane Kennedy, the organisations offer their views on the department's consultation on the taxation of foreign profits.
There is, they write, 'great advantage in engaging in a wider strategic discussion about the UK corporate tax system, which should be broadened beyond the current focus on foreign profits'.
The CIOT and ICAEW suggest that on 1 April next year the Government introduces dividend exemption 'together with, if considered absolutely necessary, the worldwide interest restrictions included in the June 2007 discussion document'.
The organisations also recommend that ministers do not introduce a dividend exemption with transitional restrictions because 'this would limit the benefit to the UK of repatriation and cause major compliance problems'.
Finally, the two institutes urge the Government to launch, in an open manner and as soon as possible, a wide-ranging consultation in respect of the UK tax base 'that is not limited to the rules in respect of foreign profits'.
'It is important to ensure that any tax reforms take account of the interests of all UK businesses and not just those carrying on international activities,' states the letter, which is signed by Ian Menzies-Conacher, chairman of the CIOT Technical Committee, and Paul Aplin, chairman of the ICAEW Tax Faculty.
They express their hope that 'a wider consultation could consider potential incentives to encourage multinationals to conduct business in the UK' and note that 'other EU member states have introduced incentives successfully — and seen economic benefits from them'.
The letter to Ms Kennedy concludes by expressing regret 'that the discussions following the June 2007 document largely ignored the important work done by the CIOT, other professional bodies and firms of advisers'.
It adds: 'It is also important that there is some discussion about the short- and medium-term financial impacts of reform for the Exchequer and for business'.
