THE GOVERNMENT’S chaotic policy on corporate taxes risks undermining confidence, hitting investment and growth, the Confederation of British Industry (CBI) warned yesterday.
CBI chief John Cridland backs government plans to cut corporation tax and to increase transparency around tax havens and where firms pay taxes. But he fears mounting rhetoric around tax avoidance is harming the other efforts to attract firms to Britain.
“There is a rich irony in the UK’s policy around tax and business – in part, this is the most pro-business investment agenda I can remember,” Cridland said. “But it is also schizophrenic, with the Prime Minister telling firms to ‘wake up and smell the coffee’ on taxes.”
But the Treasury denied tax policy is chaotic.
“The government is committed to creating the most competitive corporate tax system in the G20; but this commitment goes hand in hand with our call for strong international standards to make sure that global companies, like anyone else, pay the taxes they owe,” said a spokesperson.
New figures from the CBI show businesses paid £161bn in tax last year, 30 per cent of the total. Corporation tax raised £39.4bn while employers’ NI brought in £56.3bn.