Stephen Timms, the financial secretary to the Treasyry, has said that the new
50% tax band will not harm the UK and was the right thing to do.
Giving a speech at ICAEW headquarters in London, Timms also committed the
government to keeping the corporate tax rate the most competitive “of the major
He revealed that government would review the taxation of foreign company
branches, alongside the reform of the controlled foreign companies regime.
The Timms speech comes amid growing criticism of the 50% tax band and a
commitment from the Tories to cut corporate tax by three percentage points if
they win the upcoming General Election.
HE said: “I don’t agree that the new 50p rate of income tax will harm UK
competitiveness, particularly if you look at what others will have to do. It
effects only 1% of the population.
“It is right that those with the broadest shoulders bear their share of
responsibility during the consolidation. In these circumstances and for the time
being they are fair and justified.”
He added: “With renewed debate about the rate of corporation tax, let me
reaffirm tonight our commitment to maintaining the most competitive CT rate of
the major economies.
“But I oppose the Conservative proposal to deliver this by taxing investment,
by scrapping tax reliefs and allowances. This is not the way to support
businesses investing to grow. In fact, it’s the opposite of what we should be
Timms framed his speech as taking a fresh look at business tax and said the
government understood business needs for certainty. He said the framework for
business tax was published last week as part of this fresh direction and he
wanted the reform of foreign profits taxation to work under this new approach.
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