Taxes may be necessary, but they are also among the most significant burdens on business. Taxes reduce the return on investment, unfavourably influencing the balance between risk and reward. They drive a wedge between the cost of employing people and the take-home rewards those people demand in return for their skills and efforts. And they can also impose large administrative burdens. The Institute of Directors is therefore very concerned to improve both the design of the tax system and its administration. We are against new burdens, and we want to see existing burdens reduced.
Taxes need to be simpler. Administrative burdens are real burdens on business, which take time away from improving products, winning orders and developing staff. The administration of taxes must be fair, transparent and based solely on laws passed by Parliament. Read more>>
Capital gains tax (CGT) penalises the creation of wealth and inheritance tax (IHT) penalises the passing on of wealth to the next generation. CGT is a substitute for income tax, but it needs to recognise the nature of long-term gains. Inheritance tax should simply be abolished as soon as possible. Read more>>
Environmental taxes have their place in the tax system, but there is a real danger that because they are seen as being in a good cause, they will be set higher than they should be, or will become a way of increasing the total tax take. Read more>>
Profit is the reward for taking business risks and offering consumers the goods and services they really want. It should not be penalised. Taxes on profits should therefore be held down in percentage terms. Rate reductions can actually lead to more money for public services, as economic growth is encouraged. Read more>>
Taxes on sales have their place in the tax system, but like all taxes they must not get too high, otherwise they will damage the economy. Business rates are a well-entrenched and comparatively simple tax, but their level needs to be kept under tight control because they bear no relation to profit. Read more>>
IoD Policy exists to advance the case for business in Government, the media and other influential areas.
Policy Team