Business chiefs want taxes clarity

Sep 17 2012

Senior business figures have urged the Scottish Government to set out a clear vision on a future tax system, regardless of the result of a referendum on independence.

The business figures, from a range of sectors, said the Government must present a clear and unambiguous picture of how it will implement new tax powers in the Scotland Act and any future powers as a result of constitutional changes.

The call was made in a report from professional services firm Ernst and Young, which polled almost 200 individuals, all of whom hold senior management positions or higher in companies with operations in Scotland.

The Grasping The Thistle report is the first in a series of publications from the firm examining Scotland's fiscal future.

Those polled have called for evidence that the costs of altering current tax systems or establishing a completely separate system as a result of any future constitutional settlement would be economically justifiable.

Almost two-thirds of those surveyed expressed doubts over the viability of establishing new systems in a fast, effective and cost-efficient way.

Jim Bishop, the firm's Scotland senior partner, said: "The countdown to the Scottish Government assuming direct responsibility for some tax-raising powers was initiated when the Scotland Act received Royal Assent in May. The business community has expressed doubts about the timescales in which the relevant tax systems need to be established.

"These stem from the difficulties associated with making considerable changes to tax policy established over the course of 300 years. Looking to the future, there are concerns that the cost of reconfiguring systems and adapting to a new regulatory environment could be enormous, given that business is run on a UK-wide basis in many cases."

Colin Pearson, tax partner at Ernst and Young in Scotland, added: "A system designed from scratch could offer easier access and greater flexibility to businesses. Creating an efficient and relatively simple system would greatly enhance the credibility of the Scottish Government, boosting its efforts to secure the desired economic dividend from gaining control of taxes."

Almost half of the senior business figures were also in favour of lowering corporation tax, although control of this has not been passed over to Holyrood.