In its recommendations for this month’s Budget, the CBI said higher business taxation has helped reduce the Budget deficit, but it is now time to introduce cuts.
Sir Clive Thompson, CBI president, said: ‘The government has introduced a series of well-camouflaged taxes which has put the tax burden firmly onto business.
‘Changes made by the chancellor since 1997 will push up business taxation by almost £55bn a year for the first five years of the Labour government.
‘The priority for this Budget is to ease business worries over pressures such as the Climate Change Levy and the road fuel duty escalator. Support for SMEs through simplification and tax incentives would also help to promote longer term growth.’
In addiition, the tax system needed to be simplified, according to Sir Clive.’Time spent on complying with new tax laws is time entrepreneurs could be spending on their business.’
The CBI recommends a major reform of Capital Gains Tax for Business Angels to a rate of 10% after two years and a nil rate after five. The definition for assets which qualify for business asset treatment needs to be broader.
The CBI also said capital allowances are still its favoured method of boosting investment by SMEs. More generous first-year allowances should be made a permanent feature of the tax landscape, it said.
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