In 2005/06 corporation tax receipts reached £42.1 billion, a 29.9 per cent rise since 2000/01. This is a remarkable rise, risking the competitiveness of UK businesses abroad at a time when they are facing unprecedented competition from low tax economies not just in Eastern Europe but around the World.
The EU average corporation tax level of 25 per cent compounds the problems faced by British businesses, and the level of 12.5 per cent in the Republic of Ireland is harming the competitiveness of firms in Northern Ireland.
David Frost, director-general of the Brithsh Chambers of Commerce, said:
"The high rate of corporation tax in the UK is restricting the competitiveness of businesses here and is encouraging companies to transfer abroad."
"As the low tax economies of Eastern Europe and Asia become more of a threat to UK businesses efforts must be undertaken to keep the UK in line with international competitors. Cutting corporation tax would go a long way towards helping small and medium sized businesses who are fighting hard to compete in an environment stacked against them.”