Chancellor urged to announce corporation tax plan

Businesses want the Chancellor to announce a corporation tax reduction plan at the Spring Budget, according to a new poll from accountancy and business advisory firm BDO.

In its pre-Budget survey of businesses and private clients, 48 per cent of respondents in the Midlands said that a plan to reduce corporation tax over the next five years should be a priority for the Chancellor at the Spring Budget.

This compared to 32 per cent who favoured no further tax changes until 2026, while only 16 per cent thought that further business rate subsidies should be the priority.

When asked which taxes should rise to pay for tax cuts elsewhere, the most popular choice selected by more than half (52 per cent) of respondents in the region was a properly targeted windfall tax on energy companies.

This came ahead of taxes on personal wealth (20 per cent) and green taxes (12 per cent). Meanwhile 16 per cent of those surveyed said no taxes should rise and none should be cut.

The survey also sought to canvas business views on the ways the Chancellor could attract more of the 'economically inactive ' - and particularly the retired - back into the workforce.

According to Government figures, there are currently 6.6m people of working age who are currently neither in full-time education or employment. In total, 40 per cent of respondents favoured cutting the rate of National Insurance Contributions for both the returning employee and their employer and another 40 per cent suggested enhancing state pensions for those who work beyond their 30 qualifying years.

The survey also shone a spotlight on known issues with the application of the apprenticeship levy. Of the businesses that reported having to pay the levy, only 8 per cent said they used all the funds they put in. This reiterates the often-heard call from businesses that the chancellor should reform what the apprenticeship levy funds can be used for.

Commenting on the findings, Kyla Bellingall (pictured), regional managing partner in the Midlands said: “Businesses are continuing to tell us that they are looking for certainty and targeted support. They need a period of stability to make the investment decisions that will underpin future growth and they 're seeking support to help close the skills gap so they can deliver against their ambitions.

“There is pressure on the Chancellor to reduce corporation tax rates - both from business groups and from some within his own Party. While it 's highly unlikely this will happen immediately, businesses would certainly welcome a roadmap which signposts future reductions.

“This would provide some much-needed certainty for business planning and signal to overseas businesses that the UK is a good place to invest in the long term. ”