Tax & Accounting News

Business group’s warning over tax and regulation

19/04/2010

A leading business organisation has claimed new regulations and tax increases due to come into force over the next few years could put any recovery in the UK economy at risk.

The British Chambers of Commerce (BCC) claims the cost of new business rules and taxes to be introduced over the next four years would be a total of £25.6billion.

Just over half of this (£14billion) can be accounted for by the one per cent rise in National Insurance contributions due to be introduced from April 2011.

Other changes include the new compulsory pension scheme which is due to be phased in from October 2012, which the BCC claims will cost a further £4.8billion, the Agency Workers Directive in 2011, which will bring in additional costs of £1.5billion per year and this year’s Equality Bill, which will add a one-off cost of £190million.

While accepting the importance of pension reform, the BCC argued that the introduction date for the new scheme should be reviewed if the economy had not sufficiently recovered. It criticised the Agency Workers Directive for bringing in extra costs as well as undermining the UK’s flexible labour market.

The BCC has called for a three-year moratorium on any further employment legislation, either domestically or from the EU.

BCC director general David Frost said: “The cost of employing people must be reduced if future governments are serious about giving businesses the freedom to create jobs and drive our economic recovery.”