The CBI said Chancellor Rishi Sunak’s decision to hike Corporation Tax to 25% in one leap – the first increase since 1974 – would “cause a sharp intake of breath” for many businesses.
It also warned that the move – which is planned to come into effect in 2023 – sent a worrying signal to those planning to invest in the UK. 
CBI director-general Tony Danker said: “The government must now have a laser-like focus on the UK’s competitive position in the round, including fundamental reform of the unfair business rates system.
“The UK must remain attractive for every type of business, from the innovation, high-growth UK homegrown firm to the global firms investing in the UK.”
The BCC (British Chambers of Commerce) said while no business would relish paying higher rates of Corporation Tax, the impact of the Chancellor’s “tough decision” was blunted by the big new incentives for investment, lower rates for the smallest firms, and the extension of coronavirus support measures in the short term.
BCC director general Dr Adam Marshall also said there was much to welcome in the Budget for business communities across the UK.
“The Chancellor has listened and acted on our calls for immediate support to help struggling businesses reach the finish line of this gruelling marathon and to begin their recovery.”
He said extensions to furlough, business rates relief and VAT reductions gave firms a fighting chance not only to restart, but also to rebuild.
“We particularly welcome the massive ‘super deduction’ investment incentive that the Chancellor has put in place for the next two years,” he said.
“This responds directly to our call to encourage those businesses that can invest and grow.
“This Budget provides reassurance to businesses, provided that they are able to restart and rebuild according to the government’s road map. If firms face unexpected bumps in the road, the Chancellor must be prepared to take action until the economy is firing on all cylinders again.”
Mike Cherry, national chairman of the FSB (the Federation of Small Businesses), said while the Budget would help many small firms with their final push through to September, there is little here to aid job creation or help people return to work.
“Ensuring the newly self-employed can now access support marks a big step forward – we’re pleased to see our campaign has been heard – but directors will be incredibly disappointed that they have been left out in the cold yet again,” he said.
“There is still time to fix this entirely solvable gap in the business support landscape and we hope policymakers will take forward the proposals we’ve drawn up with experts in this field.
“Support measures should continually evolve. The challenge over the summer, and leading up to the autumn statement, will be to switch focus from survival to growth.”
