The Sunday Times has reported that Chancellor George Osborne will cut the main rate of corporation tax to 20% in his Budget next Wednesday.
He has already implemented corporation tax cuts from 28% to 25% in his time as Chancellor.
A cut to 20% would result in Britain becoming a very attractive place to do business within Europe. Whilst still higher than the 12.5% rate for trading income in the Republic of Ireland, it would be significantly cheaper than main rates of corporation tax in France (33.33%), Italy (31.4%) or the Netherlands (25%).
We expect to see lots of speculation about the content of this Budget ahead of next Wednesday.
Tax is clearly an important political issue currently, as the different parties debate the merits of taxes on income or wealth.
Over the weekend there was much debate about a proposed ‘tycoon tax’, which could see the very wealthy having to pay a minimum amount of their income in tax each year. Such a tax system would make effective tax planning incredibly difficult, as regardless of the strategies used the individuals would always have to pay the minimum rate.
This speculation over the introduction of a tycoon tax appears to have superseded calls for a ‘mansion tax’; this is a good thing in our opinion as such as tax on property would have been very complex to fairly implement.
The British Chambers of Commerce (BCC) is calling today for a cancellation of the planned increase in business rates.
They believe that the Chancellor has sufficient ‘wiggle room’ to call off the planned 5.6% increase. At the same time, they want Osborne to double the amount of subsidy available to firms who take on young adults.
We suspect that this speculation and calls for action will only intensify as we get closer to the Budget. Watch this space for more news and analysis.
Photo credit: flickr/alsokaizen
