Tax simplification hoped for in Darling’s report

08/10/07 15:19

Businesses are hoping their needs will be recognised in tomorrow’s pre-budget report, the first from Chancellor of the Exchequer Alistair Darling.

Competitiveness through a lower tax burden is on the wish lists of many small and medium-sized businesses, with the UK's rate of corporation tax currently ranking 19th in terms of competitiveness in the European Union.

“The government’s first priority should be a lower business tax burden and the Chancellor must signal to business that he will address this,” said EEF director general, Martin Temple.

The British Chambers of Commerce (BCC) also called for tax changes, saying it is ‘continuing its call for a simpler and less burdensome tax system.’ Specifically, the organisation is calling on government not to raise the Small Companies Rate from 20% to the 22%, as laid out in the budget.

The BCC is also hoping that the report will take some steps to putting transport at the heart of government policy, since it believes the UK’s competitiveness is being damaged by its ‘crumbling, under-funded transport network’.

David Frost, BCC director general, said: “Transport has been under-funded in the UK for decades and our global competitiveness is being threatened. It has not been a priority for the government, with health and education at the receiving end of large amounts of money.”

However business adviser Grant Thornton believes Alistair Darling will have little room for manoeuver in the report, although an increase of green taxes for business is to be expected, according to senior tax manager Maurice Fitzpatrick:

"Darling's first pre-budget report will ratchet up green taxes on UK business. I anticipate a 'tax on the polluter' will be used to encourage companies such as retailers and manufacturers to curb their use of excessive product packaging."

The pre-budget report will be delivered ton Tuesday, 9 October at 3.30pm.