Double tax changes will cost UK plc £740m every year, says CBI
The Confederation of British Industry has renewed its call for the Treasury to put plans to change taxation of overseas profits on the back burner.
It says a snapshot poll of a handful of member companies suggests that the cost to industry could be hundreds of millions of pounds more than announced in the Budget.
By totalling initial estimates from just 40 firms, the CBI says it has uncovered yearly costs of £740m for changes to Double Tax Relief and the Controlled Foreign Companies tax, well over double the Treasury figure.
For Double Tax Relief alone, the CBI says the cost to just 28 firms adds up to nearly £450 million, which is more than three times the Treasury figure.
Increasing tax on overseas earnings would encourage companies to set up their headquarters in countries that have more reasonable tax regimes.
The CBI says that its initial costings show that the government and business have a hugely different understanding of the impact of the current proposals. MPs are debating the Finance Bill in parliament today.
Kate Barker, CBI Chief Economic Adviser, said: ‘This is a commercially sensitive issue that is of great concern to our members. Even this limited snapshot poll of 40 companies has indicated costs that are much greater than the Treasury estimates.
‘A lot of people have speculated about total costs, but in truth the total number is not yet clear. What is clear is that the figure is substantially greater than the Red Book suggests. It is now time to move beyond the numbers and concentrate on solutions to the problems.’
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