News
18 Apr 2012

Devolving Welsh corporation tax could burden businesses

ICAEW has warned that devolving corporation tax to Wales might place additional burdens on business

In giving evidence to the sixth meeting of the Silk Commission, which was set up to review the present financial and constitutional arrangements in Wales, ICAEW director for Wales David Lermon warned that changes which added extra regulations “should be avoided”.

Lermon said, “ We believe that the new powers are a challenge as well as an opportunity; more laws do not make for more effective government, a more cohesive society or a stronger economy – more appropriate laws do.

“We are strongly of the view that legislation should always be the last, not the first resort, and that the default position of the Welsh government should be that regulatory frameworks which impact on businesses in Wales should only diverge from those in England where there is a clear and demonstrable benefit.

“In the same way, we strongly believe that the starting point for the consideration of further devolution of fiscal powers must be whether a strong case can be made that any changes will bring real benefits in terms of the functioning of the Welsh economy and political governance – and without destabilising arrangements elsewhere in the UK.

Lermon added that the key priority should be working towards a simpler tax system, and that changes to the Welsh tax system specifically might undermine wider efforts to achieve this.

He concluded that “From a business perspective, changes which add additional or distinct rules and regulations for Welsh businesses over and above those for competitors operating in England should be avoided.”

A recent opinion poll commissioned by the BBC found that of the 1,000 Welsh residents asked, 64% were in favour of the Welsh Government having powers to vary taxes in Wales.

The Commission is to report its findings in autumn 2012.

 

Helen Roxburgh

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