A significant overhaul of businesses taxes in the UK is required if the country is to remain competitive, an industry body has warned.

According to a report by the Confederation of British Industry (CBI), the UK has now reached a ‘tipping point’ as a result of the rising tax burden and, what it identifies as, the failure of the tax system to respond to global business activity.

The confederation recommends a number of measures to combat this, including a headline corporation tax rate of 18 per cent within eight years and a tax calculated on the basis of existing company accounts, removing the need for firms to have two sets of books.

"Our traditional tax system is no longer fit for purpose and is making the UK look increasingly uncompetitive. We need bold action to restore a competitive headline rate of corporate tax," stated Richard Lambert, the CBI’s director-general.

Recently, the Federation of Small Businesses urged the government to refrain from placing additional tax and regulatory burdens on small companies in the UK.