Budget 2007 date announced - Ernst & Young response

Following the 21st March Budget 2007 announcement, Paul Davies, Ernst & Young’s Head of Tax, said:

“The announcement of the 2007 Budget date is more notable than usual given that this is likely to be the Chancellor’s last Budget speech. But, it would be very wrong to see this as his final legacy."

Budget must not be handover speech

Paul continued: “The Budget is clearly a chance for the Chancellor to set out a policy agenda for his successor but it is crucial that the Budget is not seen as a hand-over speech."

Urgent call to make City more competitive

“The Chancellor should spend the next few months focusing on his promises to make the City more competitive and applying this initiative to the country as a whole. While the Government made steps several years ago to improve the attractiveness of the UK from a tax perspective, over the last few years it has done very little to improve or maintain its position. Although the City is working hard to maintain its status as an attractive business destination, the UK is losing ground because of the growing complexity and uncertainty of the tax system. In fact, as the rate of UK corporation tax slips further and further down the OECD table, there has been a notable lack of targeted Government action to tackle the problem."

Danger of being left behind

“In the interim period, the strengthening of new markets such as Eastern Europe, China and India coupled with technological advances, mean that the dialogue between different countries and markets is growing apace. If the UK rests on its traditional reputation as an investment location, it is in danger of being left behind."

Paul concluded: “If the UK is to reinforce its position in the global marketplace, the Chancellor needs to take action on international competitiveness and he needs to do it quickly”.