UK employers call for overhaul of tax system

British businesses demanded that finance minister Rishi Sunak stop raising their taxes and instead offer more help to meet the challenges of Brexit, Covid-19 and climate change when he makes major budget statements next month.

The Confederation of British Industry urged Sunak to "turn business taxation on its head" when it prepares new tax proposals and a three-year spending plan on 27 October.

CBI Director General Tony Danker said in excerpts of a speech to be delivered later on Monday, "The biggest concern we have as a country is the lack of expansion and momentum on the part of the government on some of the major economic options for business."

Danker tells Sunak to stop killing companies that invest in making their premises less carbon-intensive with lower carbon-intensive property tax payments, a quirk of the business rate system.

He also said more needs to be done to promote skills training, accelerate the development of new infrastructure projects, such as Britain's delayed high-speed railway and market regulations to attract more private investment to rewrite.

The CBI and other employer groups protested last week that jobs would be lost after the government increased Social Security contributions to social and health care.

This was followed in March by announcing a major increase in corporation tax from 2023 to help fix the hole in Britain's public finances left by Sunak's £350bn ($485bn).

"I am very concerned that the government thinks that the tax business – perhaps more politically palatable – is without growth consequences," Danker said.

As well as next month's budget announcements, Sunak and Prime Minister Boris Johnson are due to discuss investment plans with business leaders and institutional investors in October.

British productivity levels have been more than 20 per cent lower than those of the United States, France and Germany over the past two decades. According to the Organization for Economic Co-operation and Development, commercial investment in those three countries has also lagged behind every year since at least 2000.

Danker said the two-year tax break introduced by Sunak this year to boost investments from businesses carried forward investments planned for subsequent years and was limited in scope.