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Lack of tax changes 'could have severe implications'

Jul 24 2008

Unless the government makes changes to the tax system, there could be 'serious implications' for small businesses, the Forum of Private Businesses (FPB) claims.

According to the forum, when tax specialists and accountants were questioned over the tax cuts which would make the most difference to the economy, 53 per cent selected the corporate tax which applies to smaller firms, compared with the 11 per cent which selected the corporation tax for larger firms.

Pat Cobham, tax advisor for the FPB, calls the government's policy 'completely the opposite message' from the chancellor's statements in March when Alastair Darling said he wanted to encourage enterprise and small firms in the UK.

She insists: 'The increase in corporation tax to 22 per cent by 2009 will have a significant short term and long term impact on the economy as it is a disincentive to entrepreneurs.'

Professor Phil Whyman from the University of Central Lancashire explains: 'What happens in this sector matters greatly to the future of UK Plc.'

Conservative party leader David Cameron has promised that were the party to come to power, he would cut corporation tax to 25 pence and change the rules surrounding bankruptcy.

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