A new social contract between business and government on tax


It is often perceived that businesses are strongly opposed to a higher effective rate of corporation tax (as opposed to the nominal rate). This can make it difficult for politicians to increase the level of business taxation or deal with anomalies.

On the other hand, businesses regularly highlight the need for a more skilled workforce and better quality national infrastructure. They also want a level playing field within and between countries. Combine this with the increasing pressure from investors for a responsible attitude towards taxation and a recognition of the financial returns from social stability, and a more positive narrative becomes possible.

Supported by the Joffe Trust, the project will build on this narrative, reflecting support from part of the business and investment world. It will then use the narrative to design specific changes in the UK.  Finally, working with others, it will use these changes and proposals to feed into a set of principles for corporate taxation internationally. For while the primary focus of the project is the UK, the need to raise additional revenue without damaging business, and the need to establish a level playing field, are shared by countries around the world. This is especially true for developing countries.

At the project’s core is a large number of interviews with predominantly large businesses. Alongside seeking to promote a deeper, more nuanced understanding of business attitudes towards tax, we will also be examining: 

  • What it would take to increase support for higher effective taxation of business, given likely fiscal challenges in coming years
  • What business priorities are for public spending and if taxes were linked (probably indirectly) to them, how that would affect attitudes
  • What a new more cooperative approach between business and government on tax might look like, and whether it is achievable

For further information about this project, please contact Ben Glover at [email protected].