Budget 2010: ABI disappointed

ABI director general Kerrie Kelly has expressed disappointment at fresh delays to long awaited reforms to the taxation of profits made by foreign subsidiaries.

Kelly said Chancellor of the Exchequer George Osborne’s announcement that corporation tax will be reduced from 28% to 24% over the next four years sent the right signal regarding the UK’s competitiveness as a business location.

But she expressed disappointment that the new government had announced a further delay to proposals to reform the tax treatment of Controlled Foreign Companies.

She said: “We will review the interim measures announced to Controlled Foreign Companies (CFCs) rules, which deal with the taxation of foreign profits made by subsidiary companies. We urge the Government to fast track changes to CFCs as they will enable the UK to compete effectively.”

But Kelly welcomed the government’s commitment to make no further cuts to capital expenditure.

She said: “Protecting investment in flood defences is vital to protecting businesses and the economic well-being of communities. In last year’s Cumbria floods 60% of insurance claims were from businesses, demonstrating the economic value of continued investment in flood defences.”

And she said that the rolling back of public spending announced in today’s Budget provided opportunities for the insurance industry to step in.

“The insurance industry stands ready to provide private insurance-based solutions: a 5% shift towards the private sector could save the government and taxpayers £17 bn annually.”