CBI Director-General Richard Lambert today (Monday) launched a new Tax Task Force to examine whether the UK's corporate tax regime is still fit for purpose and to make recommendations for future policy.
The group will be chaired by Charles Alexander, President of GE Capital Europe and National Executive of GE in the UK, and is made up of finance directors and heads of tax from UK firms across all key sectors and of all sizes - including Pfizer, Rolls Royce, BP, Cadbury Schweppes and Barclays.
The Task Force is the latest move in the CBI's ongoing campaign on business tax, and follows the recent cut in the headline rate of corporation tax. It is tasked with evaluating whether the current UK corporate taxation regime is fit for purpose over the long term, and drawing up proposals for how it should adapt to ensure the continued competitiveness of UK-based companies.
CBI Director-General Richard Lambert, who has brought the group together, said:
"The need for the UK's headline rate of corporation tax to be at a competitive level is widely acknowledged - including by the Chancellor, if the cut in corporation tax in the Budget is anything to go by.
"What is less well understood is how globalisation may be fundamentally changing the way in which businesses think about tax. Multinational companies with long supply chains and staff in many countries are increasingly able to choose where they headquarter and where they pay tax. Alongside this they are faced with highly complex juggling acts, both within the complex UK tax system and in the way our tax system interacts with those of other nations.
"We could continue to stumble along, responding every time the European Court of Justice rules on an international tax case, or each time we fall sufficiently far down the world tax league tables that the Treasury is forced to act. That's the ostrich approach. -
"To help UK businesses stay ahead of the competition, the CBI is proactively taking a strategic look at the whole issue so that our tax regime can become sustainable for the long-term.
"Tax may not be the most political or obvious of global challenges facing us, but it is very real. It needs to be high on the agenda of the next Chancellor if he or she wants to foster a successful, growing UK business sector that provides a reliable tax revenue stream over the long term.
The Task Force will hold its first meeting later this month and will produce its final report in around nine months' time. Its recommendations will be put to the Treasury and the wider government and circulated internationally. - CBI Press Release
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