Chancellor George Osborne declares Britain ‘open for business’
The UK government will cut corporation tax to 20% from April 2015, UK chancellor George Osborne has confirmed.
This will be a single, unified rate, which means there will no longer be different rates for companies with small and large profits.
Delivering the 2013 Budget in Parliament this afternoon, Osborne said he wanted to send a message to companies aiming to move to the UK and create jobs here that “Britain is open for business”.
He added that it was the first time the country had had a single, unified rate of corporation tax since 1973.
The corporate tax rate was already scheduled to fall to 21% by 2014 following cuts revealed in the 2012 Budget.
Osborne hailed the new level of corporation tax as “the lowest of any major economy in the world”, pointing out that Germany’s is 29%, France’s 33% and the US’s 40%.
Accounting firm Deloitte’s tax partner David Clissit said the tax cut could entice more international insurers to London.
He said: “Confirmation that corporation tax will fall to 20% by 2015 increases the attraction of London as a base for international insurance groups, and underlines the city’s role as a global centre for insurance.
“International insurance companies are mobile and can be based almost anywhere in the world. Insurers were a few years ago leaving the UK for lower-tax jurisdictions such as Bermuda and Ireland but the tide is now turning.”
The chancellor also re-affirmed the government’s determination to get tough on tax avoidance. He said that the UK had struck agreements with the Isle of Man, Guernsey and Jersey that would bring in more than £1bn of unpaid taxes.
He also vowed to crack down on companies offering tax-avoidance schemes. “I want to send a message to those companies making a living from tax avoidance: this government is not going to let you get away with it”.