The British Private Equity and Venture Capital Association (BVCA) has criticised the UK government’s pre-budget report as providing a “disincentive for international investors to base their businesses in Britain”.
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In yesterday’s pre-budget report, UK Chancellor of the Exchequer Alistair Darling announced his intention to increase both national insurance contributions and the top rate of income tax after 2011. The result would be a combined tax take of almost 60 percent on the highest earners.
“With the financial services sector in virtual meltdown, international competitiveness is more important than ever,” said Simon Walker, chief executive of the BVCA, in a statement.
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He added: “This will inevitably provide a disincentive for international investors to base their businesses in Britain. The UK’s increased tax complexity and waning competitiveness will rebound to the benefit of the UK’s rivals, like Switzerland, Ireland and, increasingly, the Middle East.”
Other aspects of the Chancellor’s report, which included measures to support small- and medium-sized businesses and no changes to interest deductibility, were welcomed by the association.
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