Business taxes

While the first Labour term was marked by substantive business tax reforms, the reforms implemented in the second term were more modest, although a reform process is continuing. Since their peak in financial year 19992000, revenues from corporation tax have weakened, while some business representatives have been complaining about a rising tax burden on business. This apparent contradiction suggests that an assessment of business taxes under Labour will require careful attention to detail.

This Election Briefing Note starts with a summary of tax reforms since 1997. This is followed by an assessment of the overall effect of these changes on the tax burden faced by businesses and on government revenues. The note concludes with a discussion of future trends in corporate taxation.