UK employers, stung by new levies, call for overhaul of tax system

LONDON (Reuters) – UK corporations called on Treasury Secretary Rishi Sunak to stop raising taxes and instead offer more help tackling the challenges of Brexit, COVID-19 and climate change when he makes key budget statements next month.

The Confederation of British Industry urged Sunak to “turn corporate taxation on its head” when it presented new tax proposals and a three-year spending plan on October 27th.

“The government’s lack of detail and pace in some of the big economic decisions we have to make as a country are the top concerns for businesses,” CBI Director General Tony Danker said in excerpts from a speech later Monday target.

Danker urged Sunak to beat companies investing to make their premises less carbon-intensive with increased property tax payments, a quirk of the corporate tariff system.

He also said more needs to be done to boost skills, accelerate the development of new infrastructure projects like Britain’s delayed high-speed rail and reformulate market rules to attract more private investment.

The CBI and other employer groups protested the loss of jobs last week after the government announced it would increase social security contributions to fund social and health care.

That followed in March the announcement of a sharp increase in corporate tax from 2023 to close the gap in the UK’s public finances that Sunaks left in response to the coronavirus pandemic.

“I am deeply concerned that the government believes that corporate taxation – perhaps more politically palatable – has no effect on growth,” said Danker.

In addition to budget announcements for the next month, Sunak and Prime Minister Boris Johnson will discuss investment plans with business leaders and institutional investors in October.

British productivity levels have been more than 20% lower than the United States, France and Germany over the past two decades. According to the Organization for Economic Co-operation and Development, business investment has lagged behind these three countries every year since at least 2000.

Danker said that a two-year tax break that Sunak introduced earlier this year to stimulate corporate investment would simply bring forward investments planned for later years and would be limited in scope.

($ 1 = 0.7209 pounds)

Writing by William Schomberg, adapted by David Milliken