THE GOVERNMENT should refrain from making further significant changes to the tax system if it wishes to foster a culture of stability and certainty, according to the CBI.
Instead, the confederation said, it should allow recent positive reforms on the headline corporation tax rate, the taxation of foreign profits and the introduction of the Patent Box to take effect.
Alongside scaling back on further change, the CBI is calling for the government to make several small, targeted improvements to the tax system. They include introducing capital allowance for infrastructure investment, capping business rates at 2% at the very least – until full reform is possible – and reducing employers’ national insurance contributions to boost jobs.
In its report Tax in a global economy: the way forward, it warned “constant chopping and changing of the rules risks scaring off business investors”.
CBI chief policy director Katja Hall (pictured) said: “The government has taken action to make the UK’s tax regime more competitive and now needs to let the changes bed down and take effect.
“But the government could make targeted changes to improve competiveness – a new capital allowance to boost infrastructure spending, a cap on business rates to support the high street and reduced employers’ National Insurance to encourage jobs.
“Some international tax rules also need updating to reflect today’s changing global business environment. But as the UK seeks to shape this agenda it must not crush recent competitive gains. We must coordinate reforms with other countries so UK firms are not disadvantaged.”
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