Corporation tax needs same ‘debate’ as income tax
The rise in small firms’ corporation tax should be attracting the same level of debate and criticism as the abolition of the 10 per cent starting rate for income tax, a leading small business group has argued. The Forum of Private Business (FPB) has said that politicians should devote the same attention to the increase in the lower rate of corporation tax from 19 per cent to 21 per cent over the last 12 months as they have to the government’s decision to scrap the 10 per cent income tax rate. Corporation tax for small firms is due to rise to 22 per cent in April 2009, while the higher rate, charged to larger businesses, is being cut from 30 per cent to 28 per cent. A survey of FPB members ahead of the 2007 Comprehensive Spending Review found that two thirds of respondents believed reversing the decision to increase small firms’ corporation tax would encourage them to reinvest in their businesses. Almost half (49 per cent) said this would enable them to invest extra funds in skills and training, while 47 per cent claimed they would be more likely to seek to grow their businesses. Phil Orford, the FPB’s chief executive, said: “It is not only lower-income individuals who are being adversely affected by this government’s tax regime. Every small business has been targeted by an increase in direct taxation.” Mr Orford added: “It is understandable that media coverage has highlighted the burdens for individuals. However, the wellbeing of smaller UK businesses is also being seriously undermined, and all MPs should be aware that their business constituents are also being subjected to an unfair taxation policy.” Date:22 April 2008
|