The aim of this paper is to discuss these issues, as well as the other related key elements that are involved, in order to come to a more understanding point of view on this subject matter. This is what will be dissertated in the following.
The UK government's objectives for the business tax system are that it should "promote productivity and growth by supporting businesses competitiveness, while ensuring business contributes its fair share to the funding of public services." (Wrathmell, n.d.). Although the existing incentives for growth have had at least some success in the encouraging of small companies to invest their profits, the benefits of existing incentives are being eroded by an increasing number of new incorporations, who do not have growth ambitions, and yet are still able to take advantage of these incentives. What this means is that in regards to the present structure of the UK tax system, although it perhaps appears at first that businesses have everything to gain from engaging their staff only via intermediary companies, there is still some left to lose.
Intermediary companies act as a mediator or an agent between two or more companies, and the use of these intermediary companies can have a significantly positive effect on the companies involved.