WA82

CBI calls for corporation tax cut

The Confederation of British Industry (CBI) has called on the Government to rein in public spending and borrowing, in a bid to safeguard the UK's tax competitiveness and to allow future cuts in business taxes.

In its submission to the Treasury ahead of the forthcoming Budget, the business group warned that many companies have already relocated one or more activities abroad, and others are considering relocation.

The CBI has highlighted the fact that the UK's corporation tax rate of 30% has remained unchanged since 2000, and argues that constraining public spending growth to 2.3% rather than 2.7% for 2007/08, and 1.6% thereafter would allow a significant cut in one or more major business tax rates by 2010/11.

John Cridland, Deputy Director-General of the CBI, said, 'As the UK's tax competitiveness continues to slide, companies are waiting for a signal from Government that it is prepared to act and will create the necessary financial headroom'.

However, the Trades Union Congress (TUC) has described the CBI's call for tax cuts as 'no more than special pleading from Britain's boardrooms'.

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