Gordon Brown is under pressure to lower the rate of corporation tax in tomorrow’s Budget following the Conservatives’ pledge to do so if they win the next general election.
Shadow chancellor George Osborne has revealed plans to cut British corporation tax from 30% to 27%, following relentless complaints from UK businesses that the country’s high tax rate is hampering their competitiveness.
Last week the British Chambers of Commerce (BCC) called for the corporation tax rate to be lowered from 30% to 25%, bringing it in line with the EU average.
“UK businesses have to work in an overly taxed and regulated environment, which makes it more difficult for them to compete against businesses from low tax economies,” said David Frost, director general of the BCC.
“A cut in corporation tax would be a big boost to the competitiveness of the UK,” he added.
The organisation has commended the Conservatives’ pledge, and is hoping that Brown will buckle under this added pressure.
Frost commented: “The Tories’ pledge to cut corporation tax is an encouraging step in the right direction.”
“From having one of the lowest rates of corporation tax in the EU we have moved to having one of the highest, threatening our competitiveness and ability to attract inward investment.
“I hope that the Chancellor takes action on Wednesday to reduce the burden of tax on business and increase the attractiveness of the UK as a place to invest.”
However, business advisers remain sceptical that Brown will make any major changes in what looks set to be his final Budget, as Growing Business reported yesterday.
© Crimson Business Ltd. 2007
