Sunday, 2 October 2011

Business location, tax and the cost of making a political point


Business location decisions - in a world where the added value comes from creativity and brainpower rather than proximity to raw materials - have to be driven by the desires of those clever people who add that value. Which is why the 50p tax is a daft idea. Here's Richard Longden the boss of Aveva:

"They should drop the 50p tax," he said. "The UK is already an expensive place to live and work and if we ask overseas employees whether they want to come to work in the UK they say: 'No thanks. I don't want to pay 50pc tax'.
"It's frustrating. We feel we're not helped by the Government. Here we are bringing money into the UK, with our employees travelling all over the world in quite stressful situations and they are not rewarded for that. They are penalised."

I know that many of you don't want to believe this but what is worse is that people like Nick Clegg, Vince Cable and the entire Labour Party know full well that the 50p tax doesn't raise an extra farthing in tax and makes it less likely that successful, brainpower-led businesses will base themselves in Britain.

Aveva might not take themselves to Hong Kong but we shouldn't be taking this sort of risk - just to make a political point. Making that point is costing us dear - people who a few years ago might have chosen Britain will opt instead for somewhere else, somewhere with lower personal taxes.

It really is that simple. It's not about corporate taxes, infrastructure or business rates. It's not even about 'red tape' - it's about where your key employees want to live. And for very high skilled, high paid people who can live anywhere that means low taxes.


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