Darling 'listening' to UK firms

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Chancellor Alistair Darling has pledged to consult UK businesses on any significant changes to taxes.

He said he "listened carefully" to industry concerns about their future competitiveness amid growing tension over recent alterations.

But he admitted "getting business tax right is not easy".

The Treasury has recently clashed with businesses over its proposals to tax the foreign earnings of staff working in the UK and capital gains tax.

Britain's complicated corporation tax regime has also come under fire, driving a number of firms to move their tax domiciles offshore.

Corporation tax was in April cut to 28%, but the Irish Republic requires companies to pay less than half of that - attracting British drugs giant Shire and news and events firm United Business Media over the past months.

We recognise that the need to fund public services must be weighed against the need to maintain competitiveness Chancellor Alistair Darling

Mr Darling said he was determined to cut company taxes further and make sure that British business would not be the "fiscal fall guy".

"We recognise that the need to fund public services - like universities and transport - from which you benefit, must be weighed against the need to maintain competitiveness," he said.

'Innovate and encourage'

"I also have to ensure that tax rates encourage investment by providing incentives to innovate and encourage growth," he added.

Mr Darling said Britain was a "good place to do business" and expressed confidence in the nation's ability to maintain its appeal over the next decade.

A new forum of business experts will be set up to examine a suitable tax structure for UK companies.

CBI president Martin Broughton, who is also the chairman of British Airways, warned the government against obfuscating the tax system.

"What business wants from the system of corporate taxation in Britain is clarity, certainty and competitiveness," he said.

"What we are getting is cost, complexity and capriciousness."