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Thursday
Aug122010

Could Higher Taxes Put a Spanner in the Works for London Based Businesses?

London is viewed by many as a key place for doing business.  Many major and less well known companies set up business there because of its links with other major cities worldwide.

But could it be that the high rate of taxes in the UK might cripple the city’s status in the long term?  According to a recent study this could indeed be the case.

The study was prepared by KPMG/CBI and it focused on many businesses that are currently set up in the city.  I was not unduly surprised to read that a full 57% of the companies polled for the study expressed concerns about their future as a result of the highest rate of tax being 50%.

While many believe that higher taxes should come as part and parcel of earning more money, the rate is high when compared to some other major cities in the world.  This can make it less desirable to stay in London when the businesses have the option of moving abroad.

It is also the case that businesses may decide not to make London their base in the first place.  When considering the various options available to them I can understand why so many businesses may find it more amenable to set up their base somewhere else.

The next few months and years will be interesting; we shall see whether London can maintain its position as being one of the best places to set up a new business.  No matter what business you might be in, if you need expert tax advice you can get in touch with us here at St Matthew now.

 



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