The Institute of Directors (IoD) has proposed a set of affordable tax cuts that it claims the government should adopt in the forthcoming budget, which is scheduled for later this month.
Although the Prime Minister is promising “the most pro-growth budget this country has seen for a generation,” the IoD says that without introducing its proposed tax cuts, the government would be guilty of putting politics ahead of economics and growth would be compromised as a result.
The IoD is arguing that the government should scrap the 50 per cent high tax rate for those earning over £150,000. It report states, 'there will be little or no fiscal cost to this reversal. There may even be a revenue gain.'
The report also cites recent research by KPMG, which found that only three counties have a more severe higher rate of tax than the 50 per cent rate charged in the UK for everything earned over £150,000.
The IoD is also calling for entrepreneurial investments to be exempt from capital gains tax. It argues, 'This would encourage the injection of fresh equity capital into businesses.
'There would be no immediate tax cost because the benefit would only come on the sale of shares after they had increased in value.'