Outlook: Businesses' share of the tax burden

The ritual of Budget submissions is well under way again with yesterday's predictable appeal to the Chancellor from the CBI to treat business more kindly. Some commentators have billed it as the end of the love-fest between New Labour and business but, in fact, the CBI would have been failing in its duties if it had not pleaded its special interests.

Although complaining about higher taxes amounting to pounds 22bn during the lifetime of this Parliament - mainly due to the abolition of the dividend tax credit, the CBI's main gripe was about the abolition of ACT and switch to quarterly payments for mainstream corporation tax. It doesn't like the blow to corporate cash flow. And it wants more smallish businesses to be cushioned from the burden by not having to switch to quarterly tax payments, not just those with sales of pounds 300,000 or less as the Treasury proposes.

The point about reduced cash flow, which could hit investment spending for four years, is correct but overlooks the fact that lower corporation tax rates will over time compensate for it. This argument boils down to a natural suspicion of jam tomorrow in return for cash upfront in the business community.

However, the CBI is on stronger ground in saying the Government has opted for too low a cut-off in its definition of "small" businesses. There are 353,000 companies with turnover below the pounds 300,000 cut-off. There are only another 16,000 with turnover between that and pounds 1.5m, but many of these are growing fast and rapidly progress into the ranks of "big" companies. It would cost little in foregone tax revenue and save on administration to exempt these two from the quarterly system. After all, just 39,000 businesses pay 85 per cent of all corporation tax.

On the CBI's broader point, it is true that taxes on business are climbing. So are taxes that fall directly on individuals, through higher excise duties, "green" taxes and reduced reliefs for mortgages and profit-related pay. The tax burden faced by British business remains among the lowest in the developed world. If the industrialists approve of Gordon Brown's tough fiscal policies - which they do - they must in their hearts accept that business has to shoulder at least some of the burden of setting the public finances in order again.

News
Alex Salmond said he accepted 'the democratic verdict of the people'
newsSNP leader says Scotland must move forward as 'one nation'
Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
Sport
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
footballToure's lack of defensive work is big problem for City
Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
PROMOTED VIDEO
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Wembley Stadium
footballNews follows deal with Germany
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week