"Stable tax policy has been a competitive advantage for London."
Baroness Jo Valentine
Chief Executive, London First
London is a hub for international business and talent. A competitive tax system, both in terms of corporate and personal tax, is vital to London’s competitiveness.
The introduction of the 50% top rate of income tax put London at a competitive disadvantage against other global cities. London First ran a comprehensive, evidence-backed campaign to support the reduction of this tax. Our pre-budget letter to the Chancellor made the case for the reduction alongside an increase in the personal tax allowance. We were delighted that the Chancellor announced that the top rate would be reduced to 45% from April 2013. When economic conditions allow, we would wish to see this rate reduced further.
A competitive tax regime
London First welcomed the Government’s commitment to delivering the most competitive corporate tax regime in the G20 and is monitoring progress towards this goal. London First also supports the Government’s road map on corporation tax and has welcomed the reductions in corporation tax. However, the manner in which the Government has implemented specific taxes, such as the bank levy, has added cost and uncertainty to key sectors in the London economy. London First continues to make the case for competitive taxes across all industry sectors.
A key reason for businesses to choose to locate in London is the availability of a deep skills pool. With London’s talent being drawn from all over the world, competitive personal tax rates are vital. Alongside the welcome reduction in the top rate of personal tax, London First is campaigning for greater use of dynamic modelling to ensure the behavioural effects of taxation are fully analysed and understood.
A competitive tax regime is determined not solely by the rates of tax but also by the stability of the system. The UK was once recognised for its stable tax regime but this has changed in recent years. London First has made the case to Government for a more predictable, stable and transparent tax regime and, while there has been positive recognition of the benefits this delivers, more action is still needed.
On 24 November 2010 the Treasury Select Committee launched an inquiry into the fundamental principles of tax policy. On 25 January 2011, John Dickie, London First’s Director of Strategy & Policy gave oral evidence to the inquiry, which you can read here.
Contact Jane Archer for further information
Download and read our publications on Taxation.
- Reports (6 documents)
- Briefing paper: the case for a competitive personal taxation regime(PDF, 276.79K, February 2012)
- Letter to the Chancellor ahead of the Autumn Statement(PDF, 1.89MB, November 2011)
- Response to the Independent Commission on Banking – Interim Report(PDF, 184.68K, July 2011)
- Response to the Treasury Select Committee's inquiry into the fundamental principles of tax policy(PDF, 181.18K, August 2010)
- A Balanced Tax Policy: Supporting UK Growth report(PDF, 2.67MB, June 2010)
- UK Tax regime - Taxing London for Investment and Growth(PDF, 326.88K, November 2012)