CBI REITERATES CALL TO TACKLE £9 BILLION A YEAR COST BURDEN TO BUSINESS
March 13 2016.



The CBI has reiterated its call for the Chancellor to spur on innovation and investment and avoid increasing the mounting costs on business any further ahead of this week’s Budget.


Recent CBI analysis revealed that inaction on business rates, together with recent Government policy changes, including the National Living Wage and the Apprenticeship Levy, will cost businesses around £9 billion every year by 2020-21 and around £29 billion over the course of this Parliament.

The CBI wants to see a series of targeted steps to back UK-based businesses and support their growth ambitions. This includes making the UK tax and regulatory system more competitive; creating the environment and capabilities to innovate; providing certainty on energy policy; promoting skills and talent needed for growth and improving access to world markets.

Rain Newton-Smith, CBI Director of Economics, said: “Many sectors continue to feel the pinch as a result of global headwinds to the UK economy. At home, the Chancellor faces tough choices to continue the important job of balancing the public finances. But, the UK needs to be able to grow its way out of the deficit - the Government must send a clear signal that it stands behind business in driving jobs and prosperity.

“Businesses will want to see concrete action to reform the UK’s business rates system, support investment through the capital allowance system and equip our world-class innovators with the tools they need to compete globally.

“Growth in the UK economy does continue to hold up, but with the policy costs to business creeping up, the Government must show that it is serious about supporting UK companies to invest and prosper.”


Among the CBI’s recommendations are:

- Tackling the UK’s outdated Business Rates regime, by switching the uprating of the tax rate (“multiplier”) from RPI to CPI, more frequent revaluations and taking the smallest businesses out of the tax altogether

- Setting a clear direction on energy policy through simplifying energy efficiency taxes, setting out the future of the Carbon Price Floor and providing clarity on the Levy Control Framework to support investment in low-carbon energy

- Supporting investment through increasing the scope of capital allowances and keeping the UK competitive on interest deductions for Corporation Tax

- Propelling innovation by broadening access to existing research and development (R&D) incentives and cutting the cost of recruitment of high-skilled employees for smaller innovators through a payroll incentive

- Providing stability for employees and companies by maintaining upfront National Insurance Contribution tax relief on pensions and marginal rate relief for middle-earning families. Removing these would be a false economy, damaging pension saving and increasing the fiscal load on the Government in years to come.