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Osborne reduces UK corporate tax rate again

05 December 2012

Matthew Gilleard - ITR

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UK Chancellor of the Exchequer George Osborne has confirmed that the UK’s main rate of corporation tax will fall by a further percentage point, to 21%.

"I am today cutting the main corporation tax rate again by a further 1%," Osborne said in his Autumn Statement.

The corporate tax rate would therefore drop to 21% from April 2014, instead of 22% as originally planned.

"In America, the rate is 40%; in France it is 33%; in Germany it is 29%. From April 2014, the corporation tax rate in Britain will stand at 21%. This is the lowest rate of any major western economy. It is an advert for our country that says: come here, invest here, create jobs here; Britain is open for business," Osborne said.

The Chancellor has already cut corporation tax from 28% to 24% during his term, and it was scheduled to fall to 22% in 2014, so today’s one percentage point reduction was not expected, though it is sure to be welcomed by business.

The Chancellor also said "we will not pass the benefit of this reduced rate on to banks," and announced an increase in the bank levy, which will rise to 0.130% next year.

Read International Tax Review’s comprehensive coverage of George Osborne’s Autumn Statement here.

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