Business needs a flatter, simpler tax system The unlamented removal of the Occupy London protesters from outside St Paul's Cathedral early yesterday coincided with the revelation that Barclays Bank has been prevented from exploiting tax loopholes that could have cost Her Majesty's Revenue and Customs £500 million. On the face of it, Occupy's rather inchoate "campaign" against corporate greed could hardly have had a more timely validation. If only life - and the tax system - were that simple. Barclays was actually seeking to make use of measures that have been utilised, without incurring penalty, by other banks. This suggests that the political climate has now become so infused with animus towards bankers that such large-scale avoidance of tax is no longer regarded as palatable, by either hard-Left protesters or centre-Right politicians. Tory Treasury minister David Gauke said the Government "will not allow those who seek to benefit from this aggressive avoidance to get an unfair advantage." The situation is further complicated by the fact that the tax liabilities of the very biggest corporations - those whose earnings are a measurable share of GDP - are not calculated by HMRC but are instead negotiated, treatment of which smaller businesses could only dream. The interests of both parties are served by such horse-trading. It allows the Government to use the Byzantine intricacies of the tax system to ease the burden on corporations it would be loath to see re-locate to lower-tax regimes overseas; at the same time it allows those corporations to minimise their tax obligations legitimately. Given this chummy set-up, it is understandable that Barclays feels miffed at being blocked from taking advantage of the loopholes by retrospective legislation. Taxing global corporations will never be a simple matter. It does not help that this country has one of the most complex company tax regimes on the planet: Tolley's Tax Guide, the accountants" bible, more than doubled in size under the last government. Simplification is long overdue. In the United States, President Obama has proposed cutting the corporate tax rate and closing many tax loopholes, while all the Republican candidates have called for a flatter, simpler tax system. George Osborne, who in opposition spoke out in favour of flat taxes, should take note. A corporation tax regime that combined a lower rate with greater transparency and fewer exemptions would make sense. It would create a healthier relationship between the corporate sector and the Treasury and would also be seen as more equitable when compared with the tax treatment of smaller companies. The Chancellor should make a start in his March Budget.