As per the experts, weak growth in British productivity, lower living standards, and higher tax rates over the last decades have resulted in low investment.
After the implementation of a policy announced in March 2021, the top rate of company tax in Britain spiked from 19% in April of last year to 25% in April.
Accountants at BDO estimated that 46% of companies with revenues between $10 million and $300 million ($12 million and $379 million) claimed that the increase in corporation tax would put off investment, while 39% reported that it would limit recruiting or result in job losses.
Finance Minister Jermy Hunt said in March that businesses will be permitted to immediately deduct investments in machinery and plant against tax, a practice known as full expensing, in an effort to mitigate the impact on investment.
The tax partner at BDO, Paul Falvey, stated: “The recent rise in the headline corporation tax rate will dampen current business investment plans, although the positive reaction to the new full expensing capital allowances regime suggests this may only be a short-term effect.”
Despite the fact that Britain’s total tax burden is lower compared to that of the rest of Europe, it has been progressively rising recently as a result of an aging population and poor economic growth, and it is expected to reach its highest level since World War Two.
Hunt declared he wants to reduce their taxes at the annual meeting of the British Chambers of Commerce last week, but he is doubtful if it will be feasible when the government announces its next budget plans at the end of the year.
Based on replies from 512 businesses surveyed between March 30 and April 16, BDO conducted the survey.
- Published By Team Timeswire