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Hoban wants to end imperial tax system

Conservative Shadow Treasury Financial Secretary Mark Hoban says the UK must move away from its “imperial” tax system to one which is more “territorial” if it is to improve its international competitiveness.

Hoban: ‘Fundamental reforms’
Hoban: ‘Fundamental reforms’

At the launch last week of a report by thinktank Reform, entitled, Reality Check: Fixing the UK’s Tax System, Hoban said the UK needs to move towards a territorial tax system, a regime which would not seek to tax profits earned overseas.

He said: “We need to acknowledge that the current tax system is based on a rather imperial concept – that companies based in the UK should have their profits taxed wherever they are by the UK Treasury, with exceptions and so the principle is that everything is taxed here, with exceptions.

“In a modern global economy in the 21st century, we need to move away from that so we are really focusing on taxing profits that are made here in the UK and that is one of the concepts we need to expand and discuss in the course of the next few months.

“It is a complex process moving from the current system to a territorial system of taxation but it is the right direction and one we need to work very closely on in collaboration with the industry and tax advisers to get the transition right.”

Hoban said it is vital that corporate Britain knows the direction in which the UK tax system is heading as uncertainty hinders economic efficiency.

He said: “Uncertainty means it is hard for businesses to plan for the long term. It creates economic inefficiency, people hang back because they are not sure what is going to happen next. We have proposed some fundamental reforms to the making and scrutiny of tax policy to tackle some of the issues over certainty, predictability and stability.”

VAT’s the way to raise £15bn
The Reform thinktank has put forward a set of tax policy recommendations which it estimates would raise £16.7bn in the next three years.

Its report, Reality Check: Fixing the UK’s Tax System, calls for a broadening of the VAT base to raise additional revenue of £15bn.

It proposes increasing cash benefits by 7.5 per cent to compensate the poorest three decile groups of households for this change. It says: “All zero and reduced rates should be scrapped. Increasing revenue from VAT is preferable to increasing the burden of income tax and one uniform rate is more efficient and less distortionary.”

It says, on average, only households on incomes above £17,000 would face a hike in their VAT bill.

Reform also recommends scrapping the 50p income tax rate and reversing the restrictions on pension tax relief, reducing National Insurance contributions and replacing personal allowances with a zero-rate threshold.

It argues against recognising marriage in the tax system, saying it is inconsistent with the direction of tax systems across the world which take a more neutral approach. It says: “This will not achieve the objective of halting the decline in marriage in the UK so will not be money well spent. The transferrable tax allow ance has been costed at between £600m and £3.2bn, depending on the design.”


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. So Mark Hoban MP wants to allow ‘non doms’ etc to not pay tax on overseas earnings!

    Is this a special request from Lord Ashcroft or does he want jobs and money to haemorrhage from the UK.

    I have noticed that the closer people get to the centres of money making, sleaze and corruption, the more common sense leaves them.

    I agree that we do need to simplify the tax system greatly, but lets keep overseas tax coming in, just like all other countries do.

  2. “International competitiveness”

    How does “international competitiveness” square with RDR, imposed only on UK firms and not on EU firms passporting into the UK?

    You should know Mark that RDR breaches MIFID and that the EU will pull RDR when they catch up with this overlooked fact. Perhaps better you get off the fence before the EU pushes you and you can then claim to be an advocate of “International competitiveness”


  3. Mark Hoban is an utter fool, it people look closely at these proposals it will show yet again the true conservative message which is look after the super rich who are funding the party, he who lobby’s wins (and promises to pay tax then changes his mind! Lord cAshcroft! It wont me international competitiveness it with be national incompetence again and sleaze

  4. Agree with Steve this just smacks of sleaze sleaze sleaze

  5. I agree with Simon and Steve, smacks of sleaze and bufoonery

  6. Incompetent Regulators Awards Team 16th March 2010 at 4:49 pm

    When are the Tories going to sack this baffoon who delivers management speak and bullsh*t?

  7. Mark Hoban is an utter cretain

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