The FTSE 100 tax burden is damaging investment and job creation, FTSE 100 finance directors have warned.
Britain’s leading firms handed over more than half their gross profits to the government in taxes last year, according to the One Hundred Group, whose members represent household names like Marks & Spencer, HSBC and BP, and employ almost 6% of the UK workforce.
The government took 56.6% of their gross profits in taxes 2009, up from 48.6% in 2008, the Telegraph reports.
Ashley Almanza, chairman of the One Hundred Group and finance director of BG Group, warned that planned increases in income, employment and savings taxes from April would further hinder the creation of skilled jobs.
“What this clearly says to us is that all other things being equal, the cost competitiveness of the UK will suffer as a result of the rising total tax rate,” he said.
“The government has an objective to see the UK accumulate expertise in technology and highly skilled employment. If that is our desire, then I think these [tax] changes will undermine that objective, because they increase taxation on highly skilled workers. Ultimately our competitors in North America, Europe and the Far East will be able to afford the same sort of skills at a lower cost.”
Stephen Timms, financial secretary to the Treasury, defended the government’s plans. He told an audience in the City that the new 50p rate of income tax would not harm Britain’s competitiveness as it affected 1% of the population.