CBI probes corporate tax system

Richard Lambert wants to how globalisation has affected company thinking

The CBI has launched an investigation into whether the UK's corporate tax system is "fit for purpose".

The study will also be looking into how globalisation had affected the way firms think about tax.

The task force - to be made up of leaders from big firms like Pfizer and tax experts - will unveil its proposals for tax reform early next year.

But the CBI did stress it would look at ways to make the UK more competitive rather than demand tax cuts.

Mr Lambert says that globalisation has allowed companies to choose where they have their headquarters and where they pay tax.

"The world has changed - the tax structure hasn't changed. We want to have a really competitive economy," said CBI director general Richard Lambert.

"To help UK businesses stay ahead of the competition, the CBI is proactively taking a strategic look at the whole issue so that our tax regime can become sustainable for the long term," he added.

"We could continue to stumble along, responding every time the European Court of Justice rules on an international tax case, or each time we fall sufficiently far down the world tax league tables that the Treasury is forced to act. That's the ostrich approach."

The CBI's task force will be made up of finance directors and tax chiefs from throughout the UK's key sectors.