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Sunday, 26 March, 2000, 15:07 GMT
Brown attacks tax expert
Gordon Brown
The chancellor dimissed the tax claims
Gordon Brown has poured scorn on claims that his Budget has added billions of pounds to multinational firms' tax bills.

Speaking on BBC television's Breakfast with Frost, he cast doubt on the credibility of claims made by Peter Wyman, the senior UK tax partner at accountants PricewaterhouseCoopers (PwC).

Mr Wyman, and colleagues at PwC, claimed that the treasury may have miscalculated - vastly underestimating - the impact of one of its Budget tax changes.

But Mr Brown said that after a series of discussions between the treasury and Mr Wyman "we think we have proved their figures to be wrong".

He added: "He was the adviser to Neil Hamilton (former Conservative MP) when he was at the Department for Trade and Industry, and I think you have got to take some of the claims which have been made with a pinch of salt."

'UK extremely uncompetitive'

His comments followed a fightback by the treasury after a meeting on Friday with Mr Wyman.

Officials said he had failed to back up claims that changes to taxation on profits earned abroad would cost UK companies billions of pounds more than was suggested in the Red Book, which gives the fine details of the Budget.

Mr Wyman said that about 20 leading companies agreed with him that the Red Book figures were wrong, and said the proposed changes would make Britain's tax regime "extremely uncompetitive".

But after a hastily-arranged meeting with him, Treasury officials said he had not been "able to provide any facts or analysis to support the claim in his letter to the chancellor that the Budget proposals would cost `several billions annually'."

Obscure note

PwC declined to comment on the chancellor's remarks, but it is understood that Mr Wyman's links with Mr Hamilton were limited to being a member of the Deregulation Task Force when the former Tatton MP was a minister in the DTI.

Ernst & Young, Deloitte & Touche, KPMG, the Confederation of British Industry and the Institute of Directors have all also expressed concern about the changes.

Mr Wyman told BBC Radio 4's Today programme on Thursday that one of his clients calculated the change would cost it at least �1bn, compared with the �300m total figure estimated by the treasury.

Mr Wyman said in that interview: "This change has produced a huge increase in tax. I spoke to the Treasury yesterday at some length and they clearly have costed this carefully and sensibly, but I think they have got the sums wrong."

The change, which affects the treatment of taxes paid in foreign countries, was announced in an obscure Inland Revenue note BN2D without comment.

Mining and energy

It aims to stop companies from "mixing" their profits received from overseas with their UK profits in order to the pay the average tax rate in both countries.

That would mean companies would not be able to offset tax paid abroad against their UK tax - raising the Chancellor's revenues from corporation tax.

The Inland Revenue says the purpose of the change is "to secure a fairer share of tax from global profits for the United Kingdom".

Companies who located in the UK, but have a relatively small proportion of their income here, like mining and energy groups, are believed likely to be particularly hard hit by the changes.

These would include the likes of the South African companies Old Mutual Insurance, South African Breweries, and Anglo-American.

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See also:

21 Mar 00 | Budget2000
Tax moves to encourage enterprise
21 Mar 00 | Budget2000
No reprieve for dot.com workers
22 Mar 00 | Budget2000
Budget worries the City
21 Mar 00 | Budget2000
Brown the mugger, says Hague
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