The Confederation of British Industry has called on Gordon Brown, the Chancellor of the Exchequer, to drop the planned corporate tax changes from the current Finance Bill in order to give more time to consult with business over their implications.
The CBI calculates that plans to change the way overseas profits are taxed will cost just 40 of its members a total £740m - more than twice the Treasury's estimates for the impact of the changes across the board. The proposals, relating to double taxation relief and controlled foreign companies tax, could force companies to relocate head offices to countries with different tax regimes, the CBI warns.
A CBI spokesman said: "We have been having discussions with the Treasury about double tax relief for several years now, but the proposals contained in the Budget were never presented to us. We need more time to analyse the impact of all this."
Companies do not have enough time to prepare for the changes, which come into effect on 1 July, the CBI said. The group is to demand that the proposals are removed from the Finance Bill, which is to be debated in Parliament today.
A spokesman for the Treasury said it was sticking by its calculations. He defended the decision not to consult on the proposals until after they were announced. "The Budget is where you announce new initiatives. The Government is determined to stop avoidance of UK tax on low-tax foreign profits. We have consulted on the changes and that period ended last week. Now we're examining our findings."
The attack from the CBI comes as the Chancellor faces criticism from the Adam Smith Institute, the free market think tank, for raising the burden of personal taxation.
The institute claims the Chancellor has raised the tax burden to higher than it has been during most of the last 35 years, noting that on this day in 1965 people were enjoying their "Tax Freedom Day" - the day when they had worked long enough to pay off taxes and were subsequently working for themselves. In fairness to the Chancellor, the institute concedes that in 1984, Tax Freedom Day was 11 June.