Issuing the call ahead of his speech this evening, EEF, the manufacturers’ organisation believes the UK’s tax system is currently tilted against manufacturing and stands in the way of promoting high-tech investment and innovation. In response, EEF is urging the Chancellor to go beyond narrow tax changes dressed up as simplification and introduce genuine and far reaching reforms based on three key principles:
- A tax system that encourages manufacturing investment, reflects the true cost of modern machinery and promotes innovation.
- A tax system which is internationally competitive to ensure larger manufacturers remain headquartered here and encourages inward investment.
- A tax system which is transparent and provides predictability and certainty. This would include HM Treasury and HMRC consulting earlier and more effectively with a wider range of businesses to avoid any unintended consequences.
Furthermore, EEF also urged the Chancellor to give a clear indication of the direction of travel to give business certainty and introduce a tax system that makes the UK internationally competitive. EEF believes that a failure to do so will lead to more companies moving their headquarters out of the UK.
Commenting, EEF Director of Policy, Steve Radley, said:
"The current tax system is not fit for purpose, is close to breaking and simply cannot deliver an economy that allows the UK to pay its way and generate the wealth necessary to repay our debts.
"But the way we reform the tax system is just as important as recognising the need for change. Rather than narrow tax cuts badged as simplification, the new government should make reforms that actively help manufacturing and encourage investment, innovation and job creation.
"It must also commit to a much more predictable and transparent approach based on working closely with business."