The Chancellor of the Exchequer, George Osborne, said recently that the government will be unable to cut taxes this parliament due to the global economic crisis.
Anyone hoping for “tax cuts for Christmas” will be disappointed while the mega-rich could be concerned that the Chancellor might implement the “mansion tax” that the Lib Dems have suggested levying on multi-million pound properties.
Osborne explained that he is a true blue and he believes that lower taxes lead to an enterprising economy. However, it’s deceitful to fund lower taxes through increased borrowing and the UK public would quickly see that such a plan is not sensible. He also confirmed that the 50p tax rate will be with us at least until next year.
The Chancellor recently announced that council tax rates are to be frozen next year but the British Retail Consortium thinks he should also freeze business rates.
The director-general of the BRC, Stephen Robertson, explained that a freeze on council tax will ease the pressure on consumers but businesses desperately need support as well. As things stand at present, businesses could be facing a 5% rise in business rates next year and this could be highly destructive.
Research by UHY has discovered that the UK’s corporation tax burden is the second lowest of the G8 countries. Only Russia charges its businesses a lower rate of corporation tax.
The UHY study found that the UK had the 12th highest burden of business taxes out of 21 countries for companies with pre-tax profits of $100 million. The UK dropped to 16th out of 21 for businesses with $100,000 profits.
Roy Maugham, a UHY tax partner, said the results demonstrate the myth surrounding high corporate taxation in the UK. Although some UK businesses have relocated overseas, the business environment at home is considerably more welcoming than in the majority of the other major economies.
He also expressed surprise that Japan and the US impose higher taxes on many businesses than Germany and France; countries that have traditionally been thought of as high tax economies.
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