While the 50 per cent tax is on its way out, there are still calls to make the UK's tax system more competitive in order to attract more business to the country.
John Cridland, director-general of the CBI, remarked in a speech at the CBI/Policy exchange business taxation debate that a competitive tax system is essential for economic growth.
He explained that an important distinction needs to be drawn between transparent low-tax jurisdictions and secretive tax havens: “UK businesses need to be competitive on the world stage and are perfectly entitled to operate in low-tax jurisdictions for legitimate business purposes.”
The director-general acknowledged the statements made by activists, such as the Occupy groups, that have called for businesses to pay their fair share of tax. But Mr Cridland noted that the idea of what is 'fair' lies “in the eye of the beholder” and observed that in his opinion, the “large majority of business pays the right amount of tax, and that for the small minority which does not, times are getting tougher, not easier - and rightly so”.
In scrapping the 50 per cent tax rate the Chancellor has gone someway to improving the attractiveness of the UK as a business and investment destination. But there are still a range of issues to be tackled, including the business tax rate and the number of businesses and individuals attempting to dodge taxes.