Carbon accounting software helps firms assess energy needs

News Article - 01 May 2009
Category: Environment

The rising and falling of corporation tax levels places a burden on individuals, an expert has claimed.

According to Michael Devereux, director of Oxford University's Centre for Business, workers are the ones who suffer most from fluctuating corporation tax levels, as opposed to the company owners or investors.

Writing for Accountancy Age, the European Tax Policy Forum's (ETPF) research director cites a research paper recently presented to the ETPF and the Institute for Fiscal Studies.

The paper, based on the data of 23,000 companies, highlighted the point that workers bear the brunt of corporation tax.

"Raising the tax rate has two effects. First, the tax is passed on in lower wages. Second, capital flows out of the country in response to a higher tax," he states.

"This raises the pre-tax rate of return on the remaining capital, but leads to a fall in labour productivity and hence a fall in wages. These two effects both fall on employees."

Mr Devereux added that it would be possible to design a tax system which would impact upon shareholders as opposed to workers, but questioned whether such a framework could be achieved in practice.

Business owner Michael McQuillan recently told the Belfast Telegraph that the prime minister - who announced the date for his retirement yesterday - could have done more for small firms by cutting the rates of corporation tax.

Article keywords:

---

More industry news

• Think tank warns UK may have already slipped back into recession
• Growing demand for HR staff in technology and international sectors
• Boosting business growth a ‘priority’ to avoid Eurozone slowdown
• HMRC launches alternative disputes pilot scheme this week
• December employment statistics disregard gloomy recruitment predictions
• Eurozone manufacturing PMI shows modest improvement
• UK scores highly for economic governance by ratings agency
• Government launches two-year project focusing on manufacturing sector
• Burden of regulation on UK businesses ‘too high’

Back to news home page »