International Tax Review is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

UK chancellor stands firm despite AstraZeneca factory snub

AZ image.png
AstraZeneca discovery centre in Cambridge, UK

The UK’s biggest publicly listed company will build a major factory in Ireland because it believes the British corporate tax rate is too high.

UK Chancellor Jeremy Hunt has said he won’t consider tax cuts funded by borrowing after British pharmaceutical company AstraZeneca announced a new factory will go to Ireland because it has a lower corporate tax rate.

Jeremy Hunt told the BBC on Saturday, February 11, that he was disappointed by the decision and even agreed with the company’s stance but that deficit-financed tax cuts were simply a way of passing the bill to future generations.

It came after AstraZeneca – the UK’s biggest publicly listed company – said two days earlier that it would build a new factory costing £320 million ($360 million) in Ireland, where the headline corporate tax rate is just 12.5% (though this is expected to rise to 15% in 2024).

AstraZeneca described the UK’s corporate tax rate, which is due to rise from 19% to 25% in April and will be the highest it’s ever been, as discouraging.

Former and current Conservative politicians have weighed in to criticise the UK’s approach to corporate tax policy.

Ex-Health Secretary Matt Hancock tweeted that the decision was completely avoidable and a “massive wake-up call”, adding: “Across life sciences, data, AI, clinical trials & other industries of the future, we are squandering a lead, failing to capitalise on the global success of our vaccine programme.”

John Redwood, a member of Parliament for the ruling Conservative Party, also said the announcement showed how damaging the government’s tax policy was and that “high taxes destroy jobs and result in less tax revenue”.

This row comes ahead of the government’s spring budget, which is due on March 15. Chancellor Hunt has already said there are unlikely to be any significant tax cuts in that announcement.

The UK’s corporate tax rate has been something of a political football in the past year. In March 2022, the Boris Johnson government announced a planned rise from 19% to 25% before it was dramatically reversed under Prime Minister Liz Truss in September last year.

Just before Truss departed office a month later, Hunt reinstated the 25% headline rate, saying it would generate around £18 million a year in revenue.

more across site & bottom lb ros

More from across our site

Sandy Markwick, head of the Tax Director Network (TDN) at Winmark, looks at the challenges of global mobility for tax management.
Taxpayers should look beyond the headline criteria of the simplification regime to ensure that their arrangements meet the arm’s-length standard, say Alejandro Ces and Mark Seddon of the EY New Zealand transfer pricing team.
In a recent webinar hosted by law firms Greenberg Traurig and Clayton Utz, officials at the IRS and ATO outlined their visions for 2023.
The Asia-Pacific awards research cycle has now begun – don’t miss on this opportunity be recognised in 2023
An intense period of lobbying and persuasion is under way as the UN secretary-general’s report on the future of international tax cooperation begins to take shape. Ralph Cunningham reports.
Fresh details of the European Commission’s state aid case against Amazon emerge, while a pension fund is suing Amgen over its tax dispute with the Internal Revenue Service.
The OECD’s rules may be impossible for businesses to manage, according to tax experts from companies including Shell.
Sanjay Sangvhi and Sahil Sheth of Khaitan & Co explore this legal concept and its implications for companies doing business in India.
The UK government is now committed to replacing the ‘super-deduction’ with a 100% capital allowances regime to offset the impact of the corporate tax rise to 25%.
Corporate tax is set to rise in the UK for the first time in decades, but the headline rate remains historically low despite what many observers think.