British Chambers of Commerce (BCC) believes an increase in VAT would be much
better than the current planned rise in National Insurance.
The BCC estimates that a one percentage point increase to 18.5% will raise
£4.5bn. This compares to its forecast that a freezing NI contributions would
benefit businesses by £5.1bn the
David Frost, BCC director general, said: “It’s a tough call but we have to be
realistic about repairing the public finances and promoting recovery.”
A survey of members at the BCC showed in their opinion, over 40% of companies
want the next administration prioritise tackling the public deficit, 22% want a
vigorous assault on red tap and 13% want a more competitive tax system
Increasing National Insurance contributions was seen as the most damaging tax
rise for businesses.
“Raising a damaging tax on business like NICs will be counter productive. It
will mean fewer jobs and less tax revenue in the long-term. While businesses
fully understand the need to bring down the UK’s deficit they are clearly saying
that using VAT would be a less damaging way to achieve this,” Frost added.
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