The chancellor should delay cutting corporation tax in the forthcoming Budget and use the cash to provide relief from higher business rates, according to the British Chambers of Commerce (BCC).
In its pre-Budget submission to the chancellor, the organisation said corporation tax should remain at the current 19 per cent level until after the Brexit process has been completed, instead of being cut as planned to 17 per cent.
The BCC, which represents almost 75,000 companies employing almost six million people, said a better use of capital would be to use the cash saved to “halt” what it says is a 3.8 per cent increase in business rates.
The organisation said the planned increases in business rates for the next two years should be cancelled.
According to the corporate lobbying group, business investment should be further incentivised during the Brexit process through the introduction of a ‘Brexit Special’ Annual Investment Allowance, temporarily increasing the limit to £1m.
The annual investment allowance is a way to claim tax relief on many assets that a business will buy.
If a business buys a piece of equipment that qualifies for the annual investment allowance, it can deduct 100 per cent of the cost of that asset from its profit before it works out how much tax is due on that profit.
The BBC added government infrastructure projects should be brought forward in order to boost productivity in the economy.
David.Thorpe@ft.com
