US multinationals are avoiding Britain due to high taxes and lack of growth plans, KPMG warns
Dozens of US companies have decided against investing in the UK because Jeremy Hunt insisted on including taxes in this month’s budget, KPMG has warned.
The head of the firm’s UK tax policy department claims that the perception that the UK is not “firing on all cylinders” discourages multinationals from pouring money into the country.
Tim Sarson said the combination of bureaucracy and high taxes means the UK is not as attractive as it used to be and that “probably dozens” of firms have avoided the country in the last year.
These include building materials giant CRH, which announced last week that it would move its main listing from London to New York as it would offer “increased commercial, operational and acquisition opportunities”.
It comes ahead of the chancellor’s spring budget later this month, in which he is expected to increase corporate tax from 19% to 25% – a move that will cause pain for many companies.
Building materials company CRH, which is helping to build the Queensferry Crossing (pictured), recently announced it would move its stock listing from the UK to the United States
Chancellor Jeremy Hunt plans to raise the corporate tax rate from 19% to 25% in this month’s budget
Last week, business leaders pressured Mr Hunt to scrap the proposed tax hike, saying it would slow the economy and hurt growth.
Mr Sarson, who is from one of the Big Four consultancy firms, said overseas companies had been “making rather loud noises about the UK regime’s uncompetitiveness”.
He told the Telegraph: “There is a general feeling that Britain is not firing on all cylinders, a reluctance to invest in Britain and a feeling that the country is not quite what it was.
“We’re not exactly seen as a basket, but people often joke on conference calls, ‘What the hell are you doing?’
“What we can’t get rid of is that the UK is now not trying to be a low tax location. It’s just somewhere in the middle of the pack now.’
He added that the UK needs a clear growth strategy, otherwise living standards will fall and leave the country “lagging behind”.
“We absolutely need it [investment] Otherwise we will miss many new technologies.
“We need a very, very clear plan because we are entering a world of massive competition for incentives to invest. The danger is that we are caught in the middle.
He added: “It still prefers to be in Britain because of the language and culture, but it’s nowhere near as natural as it used to be.”
However, in the last week alone, a number of companies have decided to leave the UK and flock to competing markets. SoftBank and CRH decided to place their main listings on the New York Stock Exchange instead of London, while AstraZeneca decided to build a new factory in Ireland due to the “disheartening” UK tax rate.
Last week, Lord Bilimoria, the vice-president of the Confederation of British Industry (CBI), became the latest top business leader to call for a planned hike from 19% to 25% next month to be scrapped.
Mr Hunt has so far resisted calls for the walk to be scrapped, insisting the government will stick to its plans.
Today, a poll of Tory campaigners by the Conservative Home website found that three in five want Mr Hunt to prioritize tax cuts over reducing the UK deficit.
Cobra Beer founder Lord Bilimoria told an audience including prominent politicians at the British Kebab Awards on Tuesday: “This is not the time to raise taxes.”
He said: “I’m just in favor of not having a heavy tax burden at any time – let alone in times like these. Businesses have suffered so much.
Tim Sarson, head of UK tax policy at KPMG (pictured), says Britain is at risk of falling behind its peers in Europe and the United States
“You had three years of the pandemic, followed by the Ukraine war, the energy crisis, the cost of living crisis, inflation and on top of that you raise taxes. I mean how much can this business take?’
It came as the CBI separately asked Mr Hunt to use the March 15 budget to save companies from a tax “double-hit” next month.
Simultaneously with the end of the “super deductible” policy, companies face an increase in corporate income tax – which gives big tax breaks to companies that invest in infrastructure, factories and machinery.
Pressure on the Chancellor to help businesses mounted last week after an analysis showed he will be in for a £30bn windfall after public finances emerged as in better-than-expected shape.
Lord Bilimoria, pictured, said he had told then-Chancellor Rishi Sunak back in February 2021: “Don’t raise taxes because taxes will stifle recovery and hamper growth.”
He added: “He didn’t listen and he raised taxes to the highest level in 70 years and I think that’s absolutely wrong, including raising the corporate tax rate from 19 to 25 [and]… the abolition of the super deduction, which was a major investment incentive.
“We are very concerned about this because it places a huge additional burden on the business. From the perspective of foreign investment, this is a big concern.’
Source: | This article originally belongs to Dailymail.co.uk
https://www.soundhealthandlastingwealth.com/celebrity/us-multinational-companies-shun-uk-due-to-high-taxes-and-no-plan-for-growth-warns-kpmg/ US multinationals are avoiding Britain due to high taxes and lack of growth plans, KPMG warns