Darling told that increasing corporate tax would 'make no sense'

Source: Exec Digital UK

Date :25/02/2008 09:56:57

Britain’s largest corporate players have told the Chancellor that he should not add to the scale and complexity of the corporate tax burden.

The third ‘PwC Total Tax Contribution Report’ for the Hundred Group of finance directors of leading companies was undertaken by PricewaterhouseCoopers (PwC), the accounting group.

Tax increases

The survey of the country’s largest corporate companies, released two weeks before Alistair Darling’s first Budget, shows the scale of the tax burden they carry, with steep increases in recent years.

Overall, taxes paid by Britain’s largest corporations soared by nearly eleven percent from 2006 and by more than a third compared with levels in 2004. The amount of corporation tax that they paid rose by almost a fifth between 2006 and 2007, PwC said.

The 72 companies that took part in the survey paid £23 billion in tax last year, The Times reported.

Performance

Ashley Almanza, chairman of the Hundred Group, group finance director at British gas said that Mr. Darling should not turn to the corporate sector for extra funding to ease mounting stresses on government finances.

He told The Times: “For members of the Hundred Group, tax is increasing faster than GDP, faster than inflation and faster than the rate at which overall tax receipts are increasing.

“I think not just the Hundred Group but business more widely would be severely disappointed if we see an increase in the total tax from companies. It would make no sense at all to increase the burden on corporations which are such a vital part of the economy’s performance”

Mr. Almanza argued that the Chancellor should instead consider tax incentives to bolster investment by businesses, the newspaper reported.

“I am sure that would stimulate investment and, in due course, stimulate economic activity,” he said.

February 25, 2007