A report, prepared by a CBI taskforce, stresses a radical overhaul of the UK's corporate tax system is urgently needed for the country to regain its status as an internationally competitive location.

The report, 'UK business tax: a compelling case for change', is calling for a drop in the headline corporation tax rate from 28% to 18% within eight years, suggesting the cut would more than pay for itself over time through increased economic activity.

‘An 18% business rate within eight years would help restore the UK's low tax credentials. But a radical shake-up is also vital if clarity, certainty and simplicity are to be reintroduced to the system so firms can plan with confidence and make Britain their long-term home,’ Richard Lambert, CBI director-general, said.

The report also calls for tax calculated on the basis of existing company accounts; a 'no surprises' legislative and administrative process, allowing more time for proper consultation on tax proposals; a non-political, independent tax law commission; proactive UK government action on all cross border tax issues; and a simplified and improved tax system to stimulate the growth of small and medium-sized enterprises.

Further reading:

ABI warns Treasury against ‘ill-thought-out’ taxes

PM's adviser warns on tax competitiveness