Corporation tax rise an important issue, says pressure group

The Forum of Private Business (FPB) has called on MPs to place the issue of small companies' corporation tax hikes alongside the Government's decision to axe the 10% starting rate for personal income tax.

The FPB believes that MPs should give the same attention to the increase in the lower rate of corporation tax from 19% to 21% in the last 12 months, rising to 22% in April 2009.

What has really irked small business people is that the higher rate of corporation tax - paid by large companies, is being clashed from 30% to 28%.

The FPB's Chief Executive, Phil Orford, said:

"Every small business has been targeted by an increase in direct taxation. 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. The FPB is urging MPs to listen to the concerns of businesses in their constituencies and campaign against this unpopular tax rise."

Following a survey of the FPB’s members ahead of the 2007 Comprehensive Spending Review, 67% of respondents said that reversing the decision to increase small firms’ corporation tax would encourage them to reinvest in their businesses, with 49% indicating they would have extra funds to invest in skills and training and 47% saying they would be more likely to seek to grow their businesses.

Further research, carried out at the end of 2007 as part of Referendum, the FPB’s quarterly poll of members, revealed that a huge 97% of respondents believed that the Government’s tax changes had made the UK a worse place in which to do business.