Jeremy Hunt will make Britain a worse place to do business with rate hikes at next week’s Budget, report warns

Alamy Live News. 2N3775E London, UK. 7th Feb, 2023. Jeremy Hunt, Chancellor of the Exchequer, Downing Street, London UK Credit: Ian Davidson/Alamy Live News This is an Alamy Live News image and may not be part of your current Alamy deal . If you are unsure, please contact our sales team to check.

CHANCELLOR Jeremy Hunt will make Britain a significantly worse place to do business if he hikes tax at next week’s Budget, a report warns.

He should abandon a corporation tax rise and extend tax breaks to help firms with major investments, the Centre for Policy Studies says.

Jeremy Hunt will make Britain a significantly worse place to do business if he hikes tax at next week’s Budget, a report warns

It reckons tax hikes will see the UK fall from 10th to 33rd of 38 OECD members in terms of tax regime competitiveness, while the corporation tax rise will reduce long-term GDP by 1.2 per cent.

CPS boss Robert Colvile said: “As Chancellor, Rishi Sunak argued forcefully and persuasively for the vital role of business investment in building a high-skill, high-productivity, high-growth economy.

“We believe increasing corporation tax is a big mistake.

“But introducing full expensing as a replacement for the expiring super-deduction would at least compensate for its effects and persuade businesses to help deliver the growth we so desperately need.”

Next month corporation tax rises from 19 per cent to 25 per cent but it will still be the lowest rate in the G7.

Seventy per cent of firms are not expected to be hit with the rate remaining at 19 per cent for companies with profits under £250,000.

The Chancellor is under pressure to use the extra billions to reduce the planned rise in corporation tax that is set to rise from next month.

The National Institute for Economic and Social Research say higher revenues along with lower spending and more favourable interest rates has given the Treasury more financial head room.

But sources in Whitehall were left bemused by the analysis with Hunt accepting the money available is closer to £9.7 billion.

One says: “Our economists genuinely think they put the decimal point in the wrong place. It’s unhinged.”

A Treasury spokesperson last night said: “This analysis is a significant outlier, makes highly questionable assumptions and is very partial. The Spring Budget will be based on the forecasts of the independent OBR.”