Corporation tax could be cut to below 15% as part of the Chancellor’s plans to create a ‘super competitive economy’ with low business taxes and a global focus.
In an interview with the Financial Times, Mr Osborne insisted that Britain must show the world that it is still ‘open for business’ following the country’s decision to leave the EU.
He argued that reducing corporation tax from its current rate of 20%, to possibly below 15%, would give the UK one of the most competitive global economies.
Corporation tax is currently due to fall to 17% by the financial year beginning 1 April 2020.
‘We must focus on the horizon and the journey ahead and make the most of the hand we’ve been dealt,’ said Mr Osborne.
However, the Chancellor did not signal when any further cuts to corporation tax would take place.
The move has been welcomed by Jonathan Isaby, chief executive of the TaxPayers’ Alliance. ‘The Chancellor is absolutely right to be considering a big cut to corporation tax, as it would show that the UK is ready to seize new opportunities in the global economy,’ he said.
‘But Mr Osborne must be bold and cut the rate to 10% as soon as possible to really demonstrate that we are open for business, with competitive conditions to match our talented workforce.’
Yet the Shadow Chancellor, John McDonnell, has warned that Mr Osborne’s plans risk ‘sending out a message that Britain is becoming a tax haven’.