Chancellor Philip Hammond has reaffirmed the Government’s commitment to cutting Corporation Tax before the end of the decade, but has apparently ruled out any reduction that goes beyond that set out in the Budget earlier this year.
Speaking in Birmingham this week, Mr Hammond confirmed that the tax would be brought down to 17 per cent by 2020 to help increase investment in the UK.
“At 20 per cent, we have a highly competitive Corporation Tax rate,” he told delegates.
“And as it falls to 17 per cent over the next three years, it will be more attractive still.”
But he made no mention of the suggestion made by his predecessor, George Osborne, that trimming the tax to 15 per cent may be a possibility.
Mr Hammond did signal that he would be willing to borrow more to invest in infrastructure, but insisted that balancing the books would still be a key objective for the Treasury.
Business figures have said it is important for the Chancellor to build on his strategy in next month’s Autumn Statement.
Carolyn Fairbairn, the CBI’s director general, said: “We must now hear more on how government will work with business to build an inclusive, long-term industrial strategy. The Autumn Statement must move us several steps on to drive future investment and innovation across the country.
“The Government is right to adopt a more flexible approach to fiscal policy at this point, but it remains essential that public finances are sustainable over the economic cycle.”
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