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CBI warns of business exodus over UK taxes. By Dan Martin

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10th Oct 2006
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The government will face an exodus of firms leaving the UK unless it reduces the corporation tax burden, the Confederation of British Industry (CBI) has warned.

CBI director general Richard Lambert said if action is not taken to reduce taxes, an increasing number of British companies will move operations abroad, while more multinational companies will chose other lower-tax nations over the UK to base their European offices.

Lambert's comments follows Google's recent setting up of its European headquarters in Dublin, Ireland where corporation tax is 12.5% compared to 30% in the UK. Earlier this week, it was reported that HSBC is also considering moving its head office overseas for tax reasons.

Speaking at a press conference to mark his 100th day as CBI boss, Lambert said: "Some companies are relocating. You can see a trickle. Our anxiety is that it doesn't turn into a flood, for obvious reasons.

"Current corporation tax level are unsustainable – either companies will relocate or corporate taxes will have to comes down. In the foreseeable future, changes will be required."

The CBI claims that UK companies' losses to tax and regulation have risen by £59bn since Labour came to power in 1997.

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