PressRelease

Embargoed until 00:01hrs

Monday10 March 2003

Taxing times for UK business, says IoD

With only a month to go until the Budget almost 80 percent of UK businesses are already paying more tax than ever, it was revealedtoday. A survey by the Institute of Directors (IoD) found that the vastmajority of employers were considering cutting staff and investment due to theever-increasing tax burden.

Derek Brownlee, TaxExecutive at the IoD, said:

At a time when taxeshave increased, and are set to increase yet further, our survey revealswidespread discontent with current UK fiscal policy and the administrativeburdens which accompany it.

Specifically, thesurvey revealed that:

The introduction ofnew tax reliefs in recent years seem to have had little effect, as 78 per centof survey respondents said they had not been able to claim any of the new taxbreaks.

The NationalInsurance hike due to come into effect in April is of particular concern withover three-quarters of businesses saying they will have to take action toabsorb the cost. This includes reducing staff, curtailing future recruitmentand holding down wage increases. Only 23 per cent of employers said they wouldabsorb the cost in full.

Confusion over Tax Credits is increasing.With the Working Families Tax Credit due to be replaced by the Working TaxCredit, the survey showed four out of ten businesses are not prepared for thechange.

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RuthLea, Head of the Policy Unit at the IoD, added:

Thefigures say it all, 79 per cent of UK businesses are now paying more tax, withonly 3 per cent paying less. Equally, 77 per cent are spending more time andmoney on tax related administration.

Sonot only is the rising tax burden discouraging investment and holding backgrowth, it is also distracting employers from doing what they do best runningtheir businesses and is instead turning them into unpaid tax collectors andadministrators.

Ends 7.3.03 no.153

Notes to Editors

1.      Copies of the full survey are available from the IoD PressOffice.

2.      The IoDs Budget Submission can be downloaded from www.iod.com/pressoffice

3. The IoD (Instituteof Directors) is a non-party political independent

organisation with around 55,000 members. In additionto its wide range of

business services, the IoD provides an effectivevoice to represent the

interests of its members to government and keyopinion-formers. It also brings

the experience of business leaders to bear on theconduct of public affairs.

Contact Points:

Ruth Lea, Head of thePolicy Unit, tel: 020 7451 3291

Richard Taylor, PressOfficer, tel: 020 7451 3264

mobile and out of hours: 07721 734886

David Marshall,Director of Public Affairs, tel: 020 7451 3263

mobile and outof hours: 0776 4883420

email: press@iod.com

web: www.iod.com