Corporation tax be levied solely on the Reported Profits (capital or revenue) within the annual accounts of a company or group of companies. The only offset being for foreign taxes paid (as now).
The CT tax rates could then be on a sliding scale – say from 0 to 30%. The higher the profits the larger the tax percentage.
Why does this idea matter?
By simplifying Corporation Tax
a) listed companies that currently avoid CT with various avoidance schemes would not be able to avoid the tax. The pressure of the markets for reported profits would ensure that maximum profits are taxed.
b) the need for tax accountants by large companies with complex affairs would be removed
c) the system would be a lot fairer and all could see and understand their CT liability
d) a simpler system would save a lot of money in the assessment and collection process. Making the tax far more economic.
e) as more tax is raised the tax rates could be lowered to attract more overseas businesses.