BCC concerned over Pre-Budget Report tax increases

Date: 7th December 2009

The chancellor of the exchequer has been told to avoid imposing new business taxes in his upcoming Pre-Budget Report.

According to the British Chambers of Commerce (BCC), sole traders, partnerships and other firms will be crucial to driving the UK out of recession and should therefore not have to face the extra burden.

The business group also suggested that UK GDP would decline by 4.6 per cent during 2009, an even worse drop than the -4.3 per cent predicted in September.

Alistair Darling is thought likely to announce a record deterioration in the public finances for 2009 in the Pre-Budget Report on December 9th.

Current government forecasts suggest that deficits will increase by £175 billion during the year.

Reductions in public spending and increases to tax are both ways of reducing government debts.

Commenting, David Frost, director general of the BCC, said: "We need a thriving business sector to drive the UK's recovery, so it's vital that the chancellor's Pre-Budget Report avoids new business taxes, higher National Insurance contributions, or any measures that might damage investment, growth and job creation.

"Given the perilous state of the public finances, we cannot afford any sacred cows when it comes to making spending cuts - no matter how politically desirable it may be."

The BCC predicted that unemployment would peak at 2.7 million during the middle of 2010.

Latest official figures suggest the UK's jobless total is just under 2.5 million.

Posted by Anthony Burns