The government has created a favourable tax climate for companies based in the UK, introducing measures such as cuts to the corporate tax rate, which will reach 20% in April 2015, and the Patent Box, which taxes income that derives from patented inventions at 10%. At the same time, it has banged the anti-avoidance drum hard, reasoning that the least taxpayers could do in return for a favourable tax climate is not to engage in aggressive tax avoidance.
Alexander has certainly been far more vocal than most in the government on tax and tax avoidance.
In October, he told the BBC he was “livid” about tax avoidance by energy companies by availing of interest deductibility rules on debt.
"My message to any company that is engaged in aggressive tax avoidance is to stop it," he said.
"People are rightly livid about companies and individuals avoiding paying the proper amount of tax. I'm livid about that. It's something which is not acceptable at any time, but particularly at a time when we are going through tough spending choices. Everybody needs to pay their fair share."
And in his speech to the Liberal Democrats’ annual conference in September, Alexander highlighted that the government expected to raise far more than expected from a deal with Liechtenstein that gives UK taxpayers until 2016 to come clean about any undeclared assets held there.
These and other examples are about marking out territory for the government and the Liberal Democrats, with a general election less than two years away. As a senior member of the Treasury team, Alexander’s words undoubtedly carry impact.
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