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Title: The impact of taxation on the capital budgeting decision of corporate groups
Author: Hodgkinson, Lynn
ISNI:       0000 0001 3579 7708
Awarding Body: Plymouth Polytechnic
Current Institution: University of Plymouth
Date of Award: 1987
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The United Kingdom Tax system is not neutral with respect to a Company’s investment and financing decisions, that is incentives and disincentives to invest in particular projects or use particular types of financing arise through the imposition of taxation. Such biases may increase or decrease the value of capital projects, and if a company is to be certain of making accurate investment decisions the incremental tax flows arising due to the project must be included in the evaluation. The tax flows arising through the acceptance of a project may differ depending on the company's or group's tax profile, and therefore the overall tax position of the company or group must be considered. The thesis explains the legislation relating to the taxation of corporate groups and suggests that because the tax system is so complicated, a computerised model is probably necessary. The author's computerised model is developed and tested in the thesis, comparing evaluations conducted using the procedures and assumptions of groups in the surveys, with those of the simulation model. It is shown that both understatements and overstatements occur through incorrectly allowing for taxation. The results of two empirical surveys are presented. The first, a postal survey, discusses the methods used by companies to incorporate tax in their project appraisals, and the second, based on interviews, provides a review of the whole capital budgeting process.
Supervisor: Not available Sponsor: University of Aston
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Company investment and tax