George Osborne pledges to cut corporation tax.....even further

worldtraveller

George Osborne has pledged to slash corporation tax to encourage businesses to still invest in the UK following the EU referendum vote.

In an interview with the Financial Times, the chancellor said he would cut the rate to below 15% - some 5% lower than its current 20% rate.

That would give the UK the lowest corporation tax of any major economy.

Mr Osborne said the cut was part of his plans to build a "super-competitive economy" with low tax rates.

A Treasury spokesperson confirmed the Financial Times's story was correct but said they did not know when the cut would happen.

In March, the chancellor said corporation tax would fall to 17% by 2020.

BBC News

There are surely a whole lot of 'What if's?' before we are even near this further, possible, decrease happening. However, hopefully it is part of a broader plan, which business will clearly need to, at least partially, maybe, reduce some of the uncertainty.

michaels

The problem with ultra low corp tax is the 'flexibly paid' can use it to reduce income tax which does not enhance social cohesion.

mwpt

michaels wrote: »

The problem with ultra low corp tax is the 'flexibly paid' can use it to reduce income tax which does not enhance social cohesion.

Does siphoning all your excess salary off into a pension so that you can reduce income to the point you claim benefits at the expense of other tax payers (me) enhance social cohesion?

Herzlos

I think it's the only thing we can do to keep businesses in the UK post Brexit.

HornetSaver

Correct me if I'm wrong, but I was under the impression that corporation tax is worth circa £50 billion to the treasury. And that quarter of that would be £12.5 billion?

And correct me if I'm wrong, but I was also under the impression that our net contributions to the EU (payments to the EU budget less what we directly receive back from it) amount to circa £10 billion a year. And that £10 billion is lower than £12.5 billion?

Alter_ego

he may not be chancellor long enough to do it.

HornetSaver

Alter_ego wrote: »

he may not be chancellor long enough to do it.

It's a politically helpful statement for him to make though. If his successor agrees, they can say that Gideon felt that it was a necessary level of cut in order to preserve jobs, and that having looked at the matter they agree - without personally having to take the political criticism for it. If they disagree, he has at least bought them a bit of time.

cells

michaels wrote: »

The problem with ultra low corp tax is the 'flexibly paid' can use it to reduce income tax which does not enhance social cohesion.

he got around that by introducing his dividend tax. He can up that further at the same time to keep the 'flexibly paid' tax rates at whatever he likes

cells

HornetSaver wrote: »

Correct me if I'm wrong, but I was under the impression that corporation tax is worth circa £50 billion to the treasury. And that quarter of that would be £12.5 billion?

It is £44B at the current rate of 20%

He should reduce it to 10% which would bring it down to £22B but in theory more corporations will funnel their profits through UK PLC to pay 10% corp tax rather than pay say 33.3% in France or 30% in Germany or 30-40% in the States.

So we may find that corporates creatively shuffle profits to the UK so the tax take wont fall from £44B to £22B but somewhere in between the two figures.

IT seems to have worked well for ireland but maybe some other factors at play there.

padington

Herzlos wrote: »

I think it's the only thing we can do to keep businesses in the UK post Brexit.

Creating a neo liberal tax haven was the plan all along. The only people that will win in the long run is the rich. Britain will become even more divided.

We would be much better off putting the vote to parliament today, let parliament vote 'remain'. Parliament being sovereign should then have the final say and that should be the end to this sorry Tory party idiotic mess.

Unless Farage , Gove and Johnson or any other Brexit numpty actually ever wins a general election. Which of course thankfully they now never will as their 'wisdom' has been proven to be a bunch lies.

TrickyTree83

padington wrote: »

Creating a neo liberal tax haven was the plan all along. The only people that will win in the long run is the rich. Britain will become even more divided.

We would be much better off putting the vote to parliament today, let parliament vote 'remain'. Parliament being sovereign should then have the final say and that should be the end to this sorry Tory party idiotic mess.

Unless Farage , Gove and Johnson or any other Brexit numpty actually ever wins a general election. Which of course thankfully they now never will as their 'wisdom' has been proven to be a bunch lies.

Parliament will uphold the vote.

This is pretty desperate stuff.

If the vote to leave cannot be upheld without an act of parliament, neither can any other EU treaty that wasn't signed based on an act of parliament. Dangerous game to play, a hail mary you might say.