Manufacturers: overhaul coporate tax rules

The UK’s corporate tax system needs overhauling to encourage growth in the
manufacturing industry and drive economic recovery, a manufacturers’ association
has said.

The EEF has claimed that much of the UK’s business tax system ‘remains rooted
in the past’ and hampers investment by manufacturers.

It also claimed that the taxman’s treatment of capital expenditure has not
kept pace with technology, while companies face rising administrative and
compliance burdens, which increases the cost of doing business in the UK.

The EEG, which represents more than 6000 engineering and manufacturing
companies, has called on the government to make a number of changes to the tax
system to boost the manufacturing industry.

Its recommendations include a more ‘realistic’ treatment of capital
expenditure to reflect rapid changes in technology and longer term investment; a
long term commitment to improve the international competitiveness of the
business tax regime; and a commitment to resolve the taxation of foreign profits
issue by introducing the dividend exemption in next month’s Budget.

EEF Chief Economist, Steve Radley, said: ‘Government must match its
commitment to promoting a more balanced economy in which manufacturing plays a
greater role by addressing the current failings in our tax system.

‘In particular, the government must ensure that the taxation of investment
reflects the true costs of high-value manufacturing investment’

Further reading:

The
EEF report on the UK corporate tax system