Corporation tax issue 'important'

Members of parliament must consider increases to the corporation taxes facing small companies with the same acuteness that they are currently debating the government's plans to abolish the 10p income tax band, it has been claimed.

The Forum of Private Business (FPB) said that small businesses are coming under increasing pressure from percentage hikes in the lower rate of corporation tax. Over the last 12 months, it has risen from 19% to 21%, and is set to climb to 22% in April 2009.

Conversely, it noted that the burden on large companies is being reduced, with the higher rate of corporation tax set to be reduced from 30% to 28%.

Phil Orford, chief executive of the FPB, said: "The FPB is urging MPs to listen to the concerns of businesses in their constituencies and campaign against this unpopular tax rise."

"It is understandable that media coverage has highlighted the burdens for individuals; however, the wellbeing of smaller UK businesses is also being seriously undermined, and all MPs should be aware that their business constituents are also being subjected to an unfair taxation policy."

At the end of 2007, the FPB's quarterly poll of its members revealed that 97% of small companies believe recent tax legislation has made the UK a worse environment for business.