How much more can UK business take over tax?
CBI chief’s protest as Hunt prepares to hike rate for companies from 19% to 25%
an industry chief yesterday pleaded with Chancellor Jeremy Hunt not to raise corporation tax, asking: ‘How much can business take?’
Lord Bilimoria, the vice president of the Confederation of British Industry, became the latest top business leader to demand that a planned increase from 19 per cent to 25 per cent next month should be scrapped.
Bosses and Tory MPs have warned that the rise – due in 30 days on april 1 – will hamper growth and investment just as the UK’s battered economy seeks to recover. Mr Hunt has so far resisted calls for the hike to be axed, insisting the Government will stick to its plans. Today a poll of Tory activists by the Conservative Home website showed three in five want Mr Hunt to make tax cuts a higher priority than reducing the UK’s deficit. Cobra beer founder Lord Bilimoria told an audience, including prominent politicians, at the British Kebab awards on Tuesday: ‘This is not the time to put up taxes.’
Yesterday he said: ‘I’m just all for not having a high tax burden at any time – let alone a time like this. Businesses have suffered so much.
‘They’ve had three years of pandemic followed by the Ukraine war, the energy crisis, cost of living crisis, inflation and, on top of that, you’re increasing taxes. I mean, how much can business take?’
It came as the CBI separately urged Mr Hunt to use the Budget on March 15 to save businesses from a tax ‘double-whammy’ next month. Firms face a rise in corporation tax at the same time as the ‘super deduction’ policy ends – it gives big tax breaks to companies investing in infrastructure and factory and machinery assets.
Pressure on the Chancellor to help businesses intensified this week after an analysis suggesting he will have a £30billion windfall after public finances turned out to be in better shape than expected.
Lord Bilimoria, pictured, said he had told then Chancellor Rishi Sunak as far back as February 2021: ‘Don’t put up taxes because taxes will stifle the recovery and hamper growth’. He added: ‘He didn’t listen and he’s been putting up taxes to the highest level in 70 years and I think that is absolutely the wrong thing to do, including putting up corporation tax from 19 to 25 [and]... removing the super-deduction, which was a great incentive to invest.
‘We’re very concerned about it because it is a huge extra burden on business. It is a big worry from the inward investment point of view.’ Meanwhile, Britain’s drugs industry – reeling after astraZeneca decided to build a £320million factory in Ireland rather than the UK for tax reasons – also piled into the debate.
Richard Torbett, of the association of the British Pharmaceutical Industry, told MPs the sector was being overtaken by rival countries and ‘needs to get to a level playing field as quickly as possible’.
Education Secretary Gillian Keegan, speaking at a CBI event yesterday, said corporation tax was ‘the Chancellor’s decision’.
She added: ‘There’s also no doubt that managing the economic changes that have been brought about by the pandemic and by the war in Ukraine – and the impact that’s had on energy prices – has been difficult for governments all around the world. That’s why we’re very determined to be clear about halving inflation, getting our debt down, growing our economy and having a real laser-like focus on that as well as... the nHS and migration.’
Ms Keegan, who has held top corporate jobs, added: ‘I always have sympathy with businesses... But businesses are also a huge part of our economy and we’re all kind of in this together.’
‘This is not the time to put up taxes’