1. The Established Business Andrew Hubbard Tax Director Tenon President of the Association of Taxation Technicians

2. Issues for the established business Certainty Tax incentives Raising finance Widening the shareholder base

3. Certainty Year commenced 1 January 2004 “contentious” expenditure incurred 5 February 2004 Return submitted by 31 December 2005 Enquiry window closes 31 December 2006 Even if return submitted by (say) 1 July 2005 enquiry window still closes 31 December 2006

4. Certainty Should enquiry window be closed 12 month after submission? Should there be more ability to obtain certainty on disputed points earlier in the process? Cash flow is key for most businesses: tax uncertainties can play havoc with cash flow forecasts

5. Access to advice from the Revenue Some very good areas –Small business enterprise unit –Subcontractors enquiry line Other areas much weaker or not prepared give clear advice –Tax credits –Local offices There has been a real improvement in on-line information Better incentives and publicity for E-filing (particularly for repayments)?

6. Tax incentives Do they work? –In my experience tweaking with CA rates and special incentives have no impact on economic behaviour (other than perhaps on timing) –19% of 40% 9 months after the year end is not really going to make the difference between making an investment and not Arbitrary –What is plant? What is the logic in a modern society for giving relief for factories but not offices?

7. Raising finance EIS relief still can be very arbitrary in operation and is cumbersome. Very easy to forfeit relief when nothing “offensive” has really happened Tax relief for raising loan finance but not equity finance. Is there such a fundamental distinction? Tax relief for professional expenses too complex and dependent on artificial distinctions between investment and trading

8. R+D tax credits Not encouraging research but trying to fit what is already done within the wrapper of research Inspectors don’t like giving money away! Consultation is to be welcomed Some parts of the Revenue are very helpful in this area

9. Widening the shareholder base Any business that wants to go anywhere will have to consider widening the shareholder base Unbelievably complicated to give share incentives to employees or incoming directors. Sch 22 has made everything even worse EMI scheme is attractive, but again some strange anomalies. Why gross assets? Lack of flexibility in takeovers and restructuring The reality is far removed from the rhetoric of wanting to encourage wider share ownership