THE UK SHOULD reduce corporation tax to 15% by 2020, the Institute of Directors has said.
The institute said that there is a perception that the UK is becoming a high-tax economy, and highlighted four areas for change in chancellor George Osborne’s Budget. These included the abolition of the 50% tax rate, removing the withdrawal of the personal allowance on earnings above £100,000, reducing corporation tax to 15% by 2020 and exempting “entrepreneurial investments” from capital gains tax.
It called for the government to ensure that the UK has the lowest corporation tax in the world within ten years. Its estimates show that this would cost around £9bn per year and would be funded by “continued restraint in public spending growth”. This would send out “a very strong message that Britain is open for business”, a statement said.
Miles Templeman, director-general of the IoD, said: “The chancellor can send this signal by announcing in the Budget that the 50% income tax rate will be abolished by 2014-15, and Corporation Tax will be reduced to 15% by 2020. This is one of the most dynamic areas of the tax system where deep cuts in rates could transform business behaviour and raise more revenue in the long term.”
(Picture: © Prime Ministers Office/Crown copyright)
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