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The annual survey on company tax carried out by PricewaterhouseCoopers on behalf of the 100 Group, the association of the largest UK companies, shows - if there is anyone apart from the Chancellor who still needs convincing - that UK company tax is getting seriously out of line and making this country uncompetitive. That stream of companies moving to Ireland and Bermuda, where tax is much lower, has a point.
According to the survey, the UK has the highest average total tax rate apart from the US and Belgium. In addition, the average tax paid as a percentage of company turnover is higher in the UK than anywhere else for which PwC has figures, apart from Canada and the Netherlands.
The UK also has the highest average cost of compliance of any country apart from the US, which presumably means our system is more complex and onerous than in most other places. Finally, though this is a tangential point, the UK has a higher per capita average figure for employment taxes than all other countries except Belgium.
The point the survey does not make it that there could never be a better time for reform than now. The stock response to suggestions the corporation tax rate be reduced to levels that would make the UK competitive again - to 20% or less from the current big-company rate of 28% - is that the Treasury could not afford the loss of revenue.
But the take in the coming year is going to plummet anyway because there is going to be nothing from the banks, which in previous years have been huge contributors, and there will be much less from everyone else as profits fall. So the Chancellor has a golden opportunity to turn a negative into a positive by using the revenue drop as an opportunity to reform. There are two other reasons why this is such a good idea. The first is that such a move will stop companies moving overseas, and might even encourage more overseas companies to come here, both of which will add something to his depleted coffers.
Second, and this is the one that appeals to me, it would reduce the value of the corporation tax offset against company losses. Past company losses can be offset against current and future company profits to reduce the amount on which tax has to be paid.
Merrill Lynch, for example, has booked all its billions of losses into its London branch, and the likelihood is that by offsetting these against future profits, it will pay no tax for the next 20 years. What better way to poke it back in the eye by reducing the tax rates so that the offset becomes much less valuable?
Real outrage in Fred's pension
Despite all the political posturing and huffing and puffing, it is highly unlikely the Government can do anything within the law to claw back or force a reduction in the £693,000-a-year pension granted to former RBS chief executive, the 50-year-old Sir Fred Goodwin.
That said, pension consultant Ros Altmann points out just how outrageous the reward is by contrasting the largesse given to Sir Fred with the likely pension of the chief executive of a company made bankrupt by Sir Fred's bank or one like it when, because of the bankruptcy, the fund was in deficit.
Altmann says that if Sir Fred had worked for a private-sector company that failed, his pension arrangements would end up in the Pension Protection Fund (PPF) and his payment would be reduced to about £20,000 a year. That is all totally legal.
Those are the terms on which everyone else's private-sector final salary pension is protected. The actual maximum pension allowed by the PPF is just over £27,000 but it is discounted for those not yet retired, and discounted again for those who retire very early. So in Sir Fred's case, it would come down to about £20,000.
The fact the Government has decided taxpayers' money must be used to pretend our biggest banks have not failed does not change the fact these companies are effectively bust. That being the case, Sir Fred's pension, while it may be legal, is quite outrageous.
Simple lesson from RBS
It is a shame businesses need to be overtaken by disaster before their boards recognise they have become too big and complex to manage, and set about doing something to rectify it.
That, though, is one lesson to draw from Royal Bank of Scotland and the Stephen Hester survival plan, under which he proposes to slim down and to simplify. He wants to reduce the bank to a size where it can be properly controlled and directed.
RBS has learned the hard way what happens when businesses grow too big to control, and has now been forced by virtual bankruptcy to do something about it. Two cheers for that. But one wonders how many other businesses out there are too big to manage - but where, because they are not yet ruined, boards fail to see the danger.
