AS2012: Corporation tax drop a pleasant surprise

by Kevin Hindley, Alvarez & Marsal Taxand

More from this author

06 Dec 2012

  • Comments
Chancellor of the Exchequer George Osborne

THE CHANCELLOR gave me a pleasant surprise yesterday with the announcement that the main rate of corporation tax would be reduced to 21% from April 2014.

It has long been known that it is his policy objective to reduce the main rate and to unite it with the small companies' rate at 20% so the reduction is not a surprise from that perspective. What is surprising is the commitment shown to that policy against the current economic backdrop.

Over recent times, accusations of multi-national tax avoidance have grabbed headlines. However, there is another story unfolding in the background which is arguably much more significant, although it does not necessarily get into the press.

Five years ago, when I first started proposing the UK as a holding company jurisdiction, it was difficult to be taken seriously. These days there are a number of multi-national companies that are looking to do precisely that. More and more often, I have conversations with my clients about locating some or all of their holding and trading activities in the UK.

Some say that there is an indirect correlation between inward investment and corporation tax rate. What is absolutely clear is that a commitment to a low corporation tax rate sends a signal overseas stating that the UK is open for business. Well done to Mr Osborne. Only 1% to go.

Kevin Hindley is a managing director at Alvarez & Marsal Taxand.

Visitor comments

blog comments powered by Disqus

Add your comment

We won't publish your address

By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication

  • Send

Charterhouse Accountants

Finance Officer

Charterhouse Accountants, Beaconsfield, Permanent, Full Time, £ Competitive




Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials


Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you



Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.


iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.