The UK Treasury today announced a sweeping new proposal for the taxation of corporate profits, in which tax will be applied at the point of sale as distinct to the offices from which the corporation conducts business.
According to the Treasury, the new method of tax levying will be entirely independent of corporations' whereabouts, so avoiding pitfalls associated with the traditional Corporation Tax and bringing the collection of tax entirely within the British government's control.
'Under the new scheme, corporations will no longer be able to avoid taxation,' said a Treasury spokesperson. 'Whenever a corporation makes a sale in the United Kingdom, the new tax, to be named Value Added Tax, will be applied to the sale price, completely regardless of where the corporation is based or where its head office or any other office may be.'
Consumer watchdogs have pointed out that the new system will penalise consumers rather than targeting corporate coffers, but analysts say that consumers will benefit since tax on cost price will be less than tax on cost price plus corporation tax.
According to sources studying Treasury strategy, the new move may be followed by other forms of taxation entirely independent of corporations' whereabouts, such as Income Tax and National Insurance, to be levied on corporations' employees and their customers.
The government is also said to be considering taxes on vehicles and fuel for those who go shopping and a tax on housing for those who stay at home and buy on line.
However, a leading government backbencher dismissed the rumour as 'a tax on staying alive' and 'totally preposterous'.
He is expected to declare a sherbet dab and four ounces of peanut brittle to a cross-bench committee of MPs next week, when he may be stripped of his marbles.