Hunt admits UK business taxes are too high

Demands at the event ranged from the reintroduction of tax breaks on shopping for overseas visitors to better co-operation with business and more “concrete” actions by government…reports Asian Lite News

Jeremy Hunt admitted on Monday that British corporate taxes were too high, as business called on the government to make good on promises to mend ties with the private sector.

Speaking at a set-piece event with about 250 corporate leaders intended to counter Labour’s charm offensive with business, the UK chancellor said the economy needed to grow more to bring taxes down.

“The tax burden is too high. We would like to bring it down,” Hunt said at the Business Connect event, acknowledging a backlash to the government’s decision to increase corporation tax from 19 per cent to 25 per cent this month. “The way we will bring the tax burden down is through growth.”

But even as he and Rishi Sunak promised to “listen” and “engage” with the private sector, with the prime minister declaring himself “unashamedly pro-business”, they were repeatedly pressed on their strategy for growth and trade.

Demands at the event ranged from the reintroduction of tax breaks on shopping for overseas visitors to better co-operation with business and more “concrete” actions by government.

Gerry Murphy, chair of luxury goods brand Burberry, said the post-Brexit withdrawal of value added tax breaks on UK shopping by overseas visitors had made the country the least attractive shopping destination in Europe.

“The UK is, by far, the weakest recovery of all those major [European] markets [in Burberry trading],” he added. “We are actively exporting business as a result of that policy to our continental competitors.”

There is a growing sense of Groundhog Day as we wait for concrete policy developments

Romi Savova, chief executive of financial services company PensionBee, said: “Many business leaders have engaged with the government across multiple events and there is a growing sense of Groundhog Day as we wait for concrete policy developments.”

Conservative party insiders privately admit that Labour leader Sir Keir Starmer has led a highly successful charm offensive with business in recent months, alongside shadow chancellor Rachel Reeves.

Sunak’s appointment of former Morgan Stanley executive Franck Petitgas as his new business and investment adviser is a sign of a new effort by the government to improve relations with corporate leaders.

Sunak also announced £100mn in government funding for a task force aimed at accelerating Britain’s capabilities in an area of artificial intelligence known as “foundation models” — which is used in chatbots such as OpenAI’s ChatGPT.

The prime minister said he would bear in mind the call to restore the VAT break, but government insiders said ministers were unlikely to take such a move, which they claimed could cost £2bn a year.

The chancellor added that it was right to have imposed a windfall tax on energy companies’ profits but that he would keep “a dialogue going . . . because we need to unlock investment in the North Sea”.

ALSO READ-Sunak goes live on LinkedIn to push growth plans