Adam Cramer (partner) explores the cut to corporation tax announced in this month’s Budget.
In a boost for businesses, the Chancellor of the Exchequer announced yesterday that he would be slashing corporation tax to 17 per cent.
The reduction would be implemented before April 2020 and follows a series of similar cuts in recent years.
George Osborne said that the move would be funded by cracking down on multi-nationals who failed to pay their “fair share” of tax. He estimated that the strategy could bring in around £9 billion to Treasury coffers.
Mr Osborne has previously made it clear that he wants the UK to have a competitive regime as part of efforts to encourage more businesses to invest in the country. The latest reduction would leave Britain with the lowest rate of corporate tax in all the world’s biggest 20 economies.
“Britain is blazing a trail,” Mr Osborne told the House of Commons. “Let the rest of the world catch up”.
“All of these reforms to corporation tax will help create a modern tax code that better reflects the reality of the global economy.”
Other announcements in yesterday’s Budget speech included a commitment to restrict interest deductibility for the largest companies to 30 per cent of UK earnings.
Wilson Wright LLP
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