This is the sort of crap spouted by idiots who have never heard of "Double Tax Treaties"

Arch Home-Owner-Ist and all round corporate shill Allister Heath:

Writing in the Telegraph, Heath calls the current system of business taxation "mad and indefensible", with corporation tax being particularly unfair due to the offsets that some companies can make against their profits...

"The result is an incoherent, nightmarish tax that is clearly not fit for purpose and increasingly regular show trials, where legislators berate companies for following their own legislation but are unable to suggest any sensible reforms," said Heath.

Instead, a levy on income distributed to investors, which would include dividends, share buy-backs and interest payments, should replace the current business tax regime.

"This new levy would capture and tax just once all income generated from UK-based economic activity, dramatically reducing avoidance as well as the present double, triple or even quadruple taxation," said Heath. "Cash flows to investors from UK-generated activity would be taxed, not 'profits', so incentives to manipulate would disappear."

So he is merrily overhauling a tax system without knowing what that tax system actually is - as everybody else knows, the UK has double tax treaties with hundreds of countries which say, broadly speaking, that there is no withholding tax on dividends paid by UK companies to shareholders abroad, and in many cases, the same applies to interest payments.

Taking this week's whipping boy and scapegoat Starbucks, which is largely American owned, the underlying profits would not be taxed in the UK and neither would the distributions: it would pay no UK corporation tax at all. Clearly, it would still hand over nearly half its turnover in VAT and PAYE etc, but Heath et al appear to be oblivious to the fact that corporation tax is a only a minor irritant.

For clarity: his full article does not mention anywhere that his cunning plan would require the renegotiation and or abrogation of these hundreds of tax treaties with other countries - all of which contain provisions which benefit UK investors in overseas companies in equal and opposite measure, of course.

T.W.A.T.

If you want a simple and fair tax system, you know what to tax...