In the latest budget, Chancellor George Osborne announced that the corporation tax rate in Britain will be cut by an additional one per cent to 20 per cent by April 2015. This is in stark contrast to the previous 28 per cent rate which stood in June 2010 when the coalition Government came to power.
The latest cut in the UK’s business tax rate sends “a clear message to anyone who wants to invest here, to create jobs here, that Britain is open for business”, the chancellor said in his March Budget statement.
The cuts mean that the UK’s corporation tax rate is significantly lower than other economies including Germany (29 per cent), France (33 per cent) and the United States (40 per cent). Such tax incentives are aimed at attracting businesses to the UK.
Businesses have welcomed the announcement. CBI, the employers’ group, said: “An extra one penny cut in corporation tax will also make the UK one of the most internationally competitive locations in which to do business.”
Other business-friendly measures in the Budget include:
- An ‘employment allowance’ for every company, which will reduce their total employers’ national insurance bill by £2000 each – making it even easier and cheaper to employ people in the UK.
- Abolishing altogether stamp duty on shares traded on AIM, the London Stock Exchange’s international market for smaller growing companies.
- The top rate of income tax on incomes of more than £150,000 will fall from 50 per cent to 45 per cent from April, making the UK more attractive to high earners.
- A ‘Seed Enterprise Investment Scheme’, which offers generous incentives to investors in start-ups.