THE UK tax system deters bosses from investing profits back into their firms.
The claim comes from NatWest and Manchester Business School. It says that despite moves to encourage investment in businesses, the Treasury has clawed an extra 31 per cent more in tax revenues from small businesses over the past two years, giving Gordon Brown, a bumper "tax take." Peter Ibbetson, head of NatWest's small business services, said: "Currently the tax system makes it more attractive for small company directors to take profits out rather than keeping the money in their companies. "Future growth and investment, not just in stock and machinery but also making sure the business has enough cash is not encouraged. "So while small companies are increasing profits, they are not being ploughed back into the business to build for the future. The Chancellor must address this." NatWest and MBS proposals include raising the VAT registration threshold from £49,000 to £100,000.
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