Small firms furious over big businesses' tax avoidance

30/08/07 16:30

The government stands accused of ‘cosying up’ to big business following last week’s revelation that many of the UK’s largest firms pay little or no corporation tax.

Last week the National Audit Office claimed that a third of the UK’s 700 largest companies, including Sainsbury’s, paid absolutely no corporation tax last year, with a further 30% paying less than £10m each.

The Forum of Private Business (FPB) said its members were ‘outraged’ by this news, particularly following Gordon Brown’s decision to increase the small firms’ tax rate from 19 to 22% (over three years) in his last Budget, while lowering the rate big businesses pay from 30 to 28%.

The organisation said its members are carrying the burden in the amount of corporation tax they have to pay.

Matt Hardman, campaigns manager for the FPB, commented: “Our members feel that they are being made to pay more into the tax system because they do not have the capacity of large companies to dramatically reduce their tax burdens."

"Big business has access to government at levels that smaller companies are denied.

"These revelations are yet another sign that the government pays too little attention to smaller businesses and too much time cosying up to big business."

With these revelations coming just weeks after news that Gordon Brown’s new Business Council will contain no representatives from small firms, the FPB argued that there is ‘no-one to speak up for the small business sector’.