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BCC Publishes 2008 Budget Submission

by Jason Gorringe, Tax-News.com, London

04 March 2008

The British Chambers of Commerce's 2008 Budget Submission, published on Monday, is calling on the Government to recognise the changed economic climate and not introduce the raft of tax rises set to come into force this year.

Amongst the changes set to "pile the pressure on business this year", according to the BCC, are:

  • A raise in the Small Companies’ Corporation Tax from 20% to 21%, bringing the Treasury an extra GBP550mn
  • Rise in the rate of Capital Gains Tax from 10% to 18%, bringing the Treasury an added GBP700mn
  • Income shifting legislation, with an impact on business of GBP350mn
  • 2p rise in fuel duty. The Treasury has already had an unexpected GBP3.383bn windfall due to international oil prices since the last budget. The next 2p fuel duty rise alone will generate GBP480mn
  • Removal of Empty Property Rate Relief. Commercial properties are empty because of market conditions. Ending this relief is a GBP1.3bn tax grab for local authorities

The Chambers announced in a statement that:

"It is clear that there are challenging times ahead for the UK economy which makes the decision to raise taxes even more bewildering. The British Chambers of Commerce is predicting that average UK GDP growth will plunge from 3.1% in 2007 to 1.7% in 2008 but could recede further if the domestic policy response to the challenges ahead is inadequate."

David Frost, Director General of the British Chambers of Commerce, added:

“The Chancellor has an opportunity in two weeks time to hold back from adding GBP3.4bn worth of additional taxes on UK business. The economy is set to slow down considerably this year and the last thing business needs is to be squeezed further by the Government."

“In recent months we have seen a growing chasm between the business community and the Government. A range of poorly consulted and badly thought through policies have sent an adverse message to the business community, which threatens to erode enterprise and the spirit of entrepreneurialism in the UK."

"This Budget gives the Government the chance to regain the initiative and show that it still can lay claim to being on the side of entrepreneurs.”

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