By Richard Johnstone | 22 February 2012
Chancellor George Osborne has been urged to use next month’s Budget to end uncertainty over whether corporation tax powers will be devolved to Northern Ireland.
A Treasury consultation examining the possibility ended last July and a decision is expected this year. But Northern Ireland First Minister Peter Robinson said last month it might not come before the summer.
The
CBI wants the Treasury to scrap the idea. In its submission ahead of the March 21 Budget, the business lobby says‘the interests of the
UK are best served by a unitary corporation tax system’.
Since the consultation on corporation tax, the Scottish Government has proposed that the tax be devolved to Holyrood too.
The CBI said the current system ‘provides the simplest environment for UK and foreign businesses and investors to operate in, and minimises the potential for distortion’.
Chief
economic adviser Ian McCafferty said the potential change was creating economic
uncertainty. ‘Companies that lack certainty on how they will be taxed in the
future are reluctant to invest, so government must deliver on its corporation tax
roadmap without delay.’
He added: ‘We must make sure that we continue to attract and keep successful multinational businesses in the UK.’
In a letter to Osborne, the group has also called for businesses to have a greater say in the government’s decisions on UK tax policy.
Warning that unpredictable changes to tax rules can have a significant impact on business investment decisions and damage growth, the group called for ‘a transparent, methodical process… which could involve greater business input’.
Director general John Cridland also urged Osborne to take action in the Budget to improve the flow of credit to businesses.
He called for him to follow through plans announced in last November’s Autumn Statement, including expanding the availability of finance to mid-sized businesses through a corporate bond market. The government’s Business Finance Partnership has outlined initial plans to provide an initial £1bn through investment funds alongside private sector investors.
Cridland said: ‘The chancellor must use this Budget to score the growth and investment policy goals he put forward in his Autumn Statement.’
