Why CBI is calling for business tax reform to boost UK's competitiveness: Olga Watterich

It’s a gap that’s at risk of widening unless we take action to support UK businesses, like those here in Yorkshire and the Humber.

That’s why we have launched our case for tax reform – our Business Tax Roadmap.

We’re calling on the Government to deliver a comprehensive plan for business tax to turbocharge green investment and boost UK competitiveness.

The CBI is clear: we need a competitive tax system now – one that is both simple and proportionate.

That starts with addressing the challenges of a changing world.

With the UK running behind on its net zero targets, we need a business environment that fosters, not stalls, green investment.

UK firms, including those here in Yorkshire and the Humber, are looking for a tax strategy that boosts green investment ambitions.

They need a long-term vision, not sporadic piecemeal measures that simply look to plug gaps here and there.

With international competitors already outpacing us - particularly the US- with the Inflation Reduction Act - there’s no time to waste.

But it’s not just about making the most of the opportunities of tomorrow.

Tax reform is also a chance to get rid of some of the everyday obstacles blocking productivity now.

The UK’s tax code is one of the longest in the world.

In 2022 alone, smaller UK business spent up to 2 per cent of turnover on tax compliance – that’s the third highest in Europe.

If we’re serious about improving productivity and strengthening the UK’s competitiveness, cutting compliance costs is crucial.

Government doesn’t just need to pick up the pace on making tax simpler for business – we also need to speed up the digitalisation of our tax system to create a framework truly fit for the 21st century.

That includes making sure taxpayer data is collected and stored in a way that’s both ethical and transparent.

And we have to use it smartly – like through avoiding duplication of data requests and making it easier for taxpayers to speak to HMRC.

Not only will that make things easier for taxpayers, but it also has the potential to make a real difference for businesses.

Better digital administration of taxes through web-based software could bring productivity gains – measured by sales per employee – of up to 11.8 per cent.

Policymakers have the opportunity to make a change that will really matter to businesses.

In an increasingly competitive global market for investment, we need to unleash enterprise, not hold it back.

Failure to act now would see us lose our competitive advantage just when we need to leverage it most.

Creating a tax system that’s fit for purpose is the first step towards making sure the UK can once again be a leader – not a follower – in areas like green growth and beyond.

Olga Watterich is the CBI’s deputy regional director in Yorkshire and Humber