More than half of surveyed UK mid-market businesses expect business taxes to rise after the change in Labour leadership.
Tax expectations matter for apparel, textile and retail firms planning investment, compliance budgets and hiring.
BDO is proposing a simpler 21 per cent corporation tax rate alongside skills and sector measures to support growth.
BDO said its Mid-Market Tracker, a bi-monthly survey of 500 UK mid-sized businesses, found that 54 per cent of respondents expect business taxes to rise as a result of the change in Labour leadership. The survey also found that 32 per cent expect taxes to remain at current levels until the end of the Parliament, 13 per cent expect them to go down and 1 per cent are unsure.
The figures were released after BDO published its ‘Mid-Market Manifesto,’ which sets out policy recommendations aimed at supporting growth in Britain’s mid-market business sector. The UK mid-market comprises less than 1 per cent of private sector businesses but accounts for more than one in three private sector jobs and more than 40 per cent of private sector revenues.
Among the recommendations, it has proposed simplifying corporation tax by replacing the current main rate and marginal relief system with a single rate of 21 per cent, just below the European Union average of 21.6 per cent.
It said a simpler regime would support investment by reducing uncertainty, lowering compliance burdens and giving businesses greater confidence over the tax implications of growth.
Paul Townson, tax partner, BDO said, “It’s clear that many businesses are concerned about the tax implications of the change in the Labour leadership. This is at a time when many are already struggling with both high taxes and high compliance costs. However, the incoming administration has an opportunity to do some fresh thinking on how best to drive growth in the UK economy which has recently proved elusive. Currently the UK tax code is too long, too complex and in urgent need of simplification.”
The advisory firm said other recommendations in the manifesto include further tax simplification to promote investment, boost employment and back entrepreneurship; measures to address skills shortages across sectors and regions; and sector-specific policy suggestions for growth-driving sectors identified in the government’s Invest 2035 Modern Industrial Strategy.
Fibre2Fashion News Desk
