The Chancellor’s has stated that corporation tax will reduce from the current rate of 24% in 2012/13, to 23% in 2013/14 (announced previously) and to 21% in 2014/15 (this being the news!). This is very encouraging for UK business.

On the other hand, however, no doubt spurred on by the recent media outrage over the amount of UK corporation tax paid by various multinationals, the Chancellor says that he will target (together with France and Germany) what he describes as “artificial transfers of profits to tax havens”. Whether this will result in new rules (e.g. the potential blocking of deductions for IP royalty payments), transfer pricing will definitely be increasingly in the spotlight.