Partner Article

Potential £1.35bn from 'tax holiday'

The Chancellor, Alistair Darling, is being urged to introduce a corporation tax holiday for businesses after figures published today show it would be worth an estimated £1.35bn to the North East economy.

A report released today by the North East Chamber of Commerce (NECC) calls on the Government to suspend the tax and instead allow firms to reinvest the money in capital projects. The move would create jobs and stimulate the economy at a time when it is greatly needed.

NECC’s Fiscal Policy Group, comprising senior business figures and leading academics, produced the document which will be sent to the Chancellor ahead of his Budget statement on April 22.

David Elliott, Tax Partner, at KPMG, chaired the group. He said: “This report has given considerable thought to the measures needed to stimulate economic growth at this time. Some are more radical than others but all are focused on getting the economy moving again. I have no doubt that many business people across the region are interested to learn of the Chancellor’s plans for stimulating the economy when he unveils his Budget next month.”

The report highlights an armoury of measures the Government might consider implementing to kick-start the economy.

Andrew Sugden, NECC membership and policy director, himself a member of the fiscal policy group, said: “The Government is facing a stern test to get the economy back on track. While its efforts to date have been welcome, there is much more that can be done to work with businesses in these unprecedented times.

“A corporation tax holiday that obliges businesses to reinvest the money in major projects would be a serious shot in the arm for UK companies and will bring jobs benefits to boot. Ally it with a short-time working compensation scheme and you have a combination that would help companies of all sizes and in all sectors to ride the storm.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .