Business group seeks to raise profile of corporation tax debate

The business community has urged MPs to give criticisms of the recent rise in small firms’ corporation tax the same weighting as public concern over the abolition of the 10% starting rate of personal income tax.

The Forum of Private Business (FPB) believes that politicians should dedicate the same level of attention to the increase in the lower rate of corporation tax, which has risen from 19% to 21% in the last 12 months.

The lower rate is scheduled to inflate to 22% in April 2009 while the higher rate, which is paid by larger firms, is being cut from 30% to 28%.

‘It is not only lower-income individuals who are being adversely affected by this Government’s tax regime,’ said the FPB’s Chief Executive, Phil Orford.

‘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.’

Indeed in a survey conducted by the FPB, 67% of respondents said they would be more likely to reinvest in their business if plans to increase small firms’ corporation tax were scrapped.

Meanwhile, 49% of those quizzed claimed the reversal of the controversial tax hike would give them extra funds to invest in skills and training, and 47% said they would be more likely to seek to grow their businesses.