One in five firms in the UK moving some business abroad

One in five companies have relocated some of their activities overseas and a third are considering it because of gripes over tax, according to a poll by the Confederation of British Industry published yesterday.

The business lobby group said its survey of 87 companies showed 71 per cent thought corporation tax should be reduced, as it began its annual two-day conference a week before Chancellor Gordon Brown's pre-budget report on December 6.

"Our survey shows that business leaders believe the UK's corporate tax regime is more burdensome than it was five years ago, and that this is making the UK less attractive as an international business location," said CBI Director General Richard Lambert.

The survey also showed nearly 20 per cent of companies had even considered moving their headquarters abroad.

The CBI called on Mr Brown to cut companies' tax bill by £2 billion in 2007/08 and then repeat the reduction annually to achieve a cut in the corporation tax rate to 25 per cent by 2011 from 30 per cent now.

Mr Brown, who political commentators expect to take over from Prime Minister Tony Blair within a year, will address the CBI conference today and seek to reassure firms that he is listening to them, as all political parties to try and capture the business vote.

But government sources say any big changes in headline tax rates are very unlikely in the pre-budget report. Mr Lambert said he expected no quick fixes.

"However, business needs a clear signal that the UK is going to shift course, first by checking the trend to a more burdensome business tax regime, and then by moving back up the competitiveness league tables," he said.