CBI calls for corporation tax below 24%
Business group calls for low corporation taxes and criticises proposals for UK owned foreign companies
THE CBI has said the corporate tax rate need to fall below the government’s intended level of 24% and that the UK has to concentrate on being more competitive.
The business group also revealed concern about the proposals for handling the way foreign companies owned by UK businesses are taxed.
Responding to the consultation on corporate tax reform the CBI’s director general John Cridland said: “The main purpose of tax reform has to be improved competitiveness, making the UK a more attractive location for inward and outbound investors.
“Encouraging companies to base their operations in the UK will create jobs and growth. The government’s commitment to move towards a lower corporate tax rate will help this, but at the same time it must address the effective tax burden on businesses which currently makes the overall system uncompetitive.”
He added: “The government also needs to address international perceptions that HMRC is very aggressive in its treatment of Controlled Foreign Companies.”
The CBI believes the proposed controlled foreign companies (CFC) regime is “cumbersome” because of the way anti avoidance measures have been included.
The current CFC regime has come under much criticism in recent months including the implied attack from protestors with UK Uncut who have demonstrated outside branches of Vodafone complaining about the deal the company agreed with HMRC.
Elsewhere the corporate tax proposals have come under criticism from the Institute for Fiscal Studies.
In a report at the beginning of February the IFS said: “If all these reforms are enacted, the UK will have a corporation tax rate lower than most European countries currently have, but a system with significant additional complexity and which provides an expensive and distortionary tax break to a handful of firms, largely for activity that would have occurred in the absence of the policy.”