The UK is in danger of becoming less competitive because of its complex and uncertain tax regime, accountancy firm Ernst & Young has claimed in a report.
In a separate report, the CBI called on the government to get a “tighter grip” on spending to ease the tax burden.
The Tories said the CBI study was more evidence of a complicated tax system.
The issue of taxes has dogged the government in the past couple of years as critics questioned how Chancellor Gordon Brown would fund his spending plans.
Gordon Brown will leave his successor at the Treasury a double whammy of £10 billion in tax rises and £10 billion in public spending cuts, a report from an influential economic think tank says today.
Since Mr Brown became Chancellor 10 years ago the total rise in tax revenue has been £40 billion or £1,300 per family, the independent Institute for Fiscal Studies found.
If, as now seems certain, Mr Brown succeeds Tony Blair this summer, his first years as prime minister will see not only the “tightest squeeze on spending” for a decade but also increases in taxes totalling £10 billion.
The Institute’s Green Budget for 2007 claims that Mr Brown’s record at the Treasury over the past decade was not as glowing as the Chancellor likes to make out.
Council tax bills could hit £1,500 by the end of Labour’s third term in office, the Tories claimed yesterday as the Government announced a 3.7 per cent increase in central funding for town halls.
Local council chiefs said that, as a result, council tax bills next year are again likely to increase by about 5 per cent, twice the rate of inflation. Londoners are expected to be the hardest hit because of a lower settlement for the capital.
Details of the grants, disclosed by the Department for Communities and Local Government, showed big variations in allocations across the country, ranging from 2.7 per cent to over 9 per cent.
Tory party proposals for £21 billion in tax cuts would benefit the rich and hurt the poor, an independent think-tank claimed today.
A high powered Conservative working group made the recommendation after a year-long re-examination of the party’s tax policies – although David Cameron, the Tory leader, has already ruled out pledging tax cuts at the next election.
The proposals include a 2p cut in the basic rate of income tax, scrapping stamp duty on shares, rolling back business taxes and taking 2.5 million
High corporation tax levels are forcing an increasing number of multi-national firms out of the UK, business leaders’ body the CBI has claimed.
CBI chief Richard Lambert said the UK was less competitive because other European states had lower business tax.
He said the 30% corporation tax in the UK compared unfavourably with the 12.5% rate in the Republic of Ireland.
“Either companies will generate more revenue outside the UK or corporation tax has to come down,” Mr Lambert said.
YOUNG people will have to hand over almost half their salary to the taxman, according to a report which shows the escalating financial pressures facing new graduates.
Rising taxes and the overhaul of the pension system mean that students starting at university this year will be spending 48 per cent of their income on tax and other payments until they are 35. Many young people are already heavily in debt. Since 2000, graduate debt has increased by 318 per cent, while the average expected debt for new undergraduates rose by 8 per cent in 2006 to nearly £15,000.
The report by Nick Bosanquet, Professor of Health Policy at Imperial College, London, for the think-tank Reform, blames Labour’s changes to the tax and benefit system, which it says have “significantly penalised young workers”.
British companies are overtaxed and face too much regulation which is hitting profits and jobs, a business leader is warning.
In his first major public speech as Director General of the CBI, Richard Lambert said that too few politicians recognise the “fundamental role” of business.
Britain needed a free trade, low tax, high skill economy – otherwise it faces an inward-looking, protectionist state bedevilled by high unemployment and high taxes, Mr Lambert said.
Business has reacted to globalisation by introducing new work practices, offshoring jobs and generating more employment but he said these changes had loosened the ties between business and society.
The fall in trust had partly followed lower-skilled workers finding themselves competing with low-cost workers overseas.
Mr Lambert said the world was on the brink of a “third industrial revolution” driven by the easy flow of information over great distances and at low cost.