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Policy publications - Employment & Skills Policy publications - Productivity & growth Press Releases

‘Much for business to like’ in Hammond speech but IoD warns of acting alone on digital tax

01 Oct 2018

devicesResponding to Philip Hammond’s Conservative party conference speech, Edwin Morgan, Director of Policy at the Institute of Directors, said:

“There was much for business to like in this speech, particularly the insistence that government must work hand in hand with employers to deliver the skills, opportunities and economic growth the country needs.

“Firms will welcome the proof that ministers are listening to concerns on the Apprenticeship Levy, and we hope to see this repeated in other areas as the conference continues. This was also a sober and pragmatic speech when it came to Brexit, acknowledging that whatever happens in the ongoing talks, businesses need both sides to focus on minimising friction for trade in future.

“The Chancellor is absolutely correct to say that the Government must find ways to make sure the tax and regulation systems are able to adapt to the realities of the modern economy. Digital technology has brought huge gains in terms of innovative new companies and services, but it has also shown up how out-of-date our tax regime is. For example, the high street is being hammered by business rates at the same time as shopping increasingly moves online.

“But while the balance between high-street shops and out-of-town warehouses can be redressed, the answer isn’t more tax for everyone. Simple moves, such as lifting many more small businesses out of business rates are the kind of quick action we would like to see the Chancellor take at the Budget.

“Politicians need to be careful what they wish for when suggesting acting alone on taxing global companies. As attractive as a digital services tax may sound to some, in the context of Brexit the UK must look to make itself more internationally competitive, not less. Efforts to level the playing field and update taxes to reflect how today’s economy works are welcome, but not at the expense of the UK’s reputation as a good place to do business.”

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