UK chancellor stands firm despite AstraZeneca factory snub

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

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 | AstraZeneca

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 & shared bottom lb ros

More from across our site

The threat of 50% tariffs on Brazilian goods coincides with new Brazilian legal powers to adopt retaliatory economic measures, local experts tell ITR
The country’s chancellor appears to have backtracked from previous pillar two scepticism; in other news, Donald Trump threatened Russia with 100% tariffs
In its latest G20 update, the OECD also revealed tense discussions with the US where the ‘significant threat’ of Section 899 was highlighted
The tax agency has increased compliance yield from wealthy individuals but cannot identify how much tax is paid by UK billionaires, the committee also claimed
Saffery cautioned that documentation requirements in new government proposals must be limited if medium-sized companies are not exempted from TP
The global minimum tax deal is not viable without US participation, Friedrich Merz has argued
Section 899 of the ‘one big beautiful’ bill would have spelled disaster for many international investors into the US, but following its shelving, attention turns to the fate of the OECD’s pillars
DLA Piper’s co-head of tax for the US and Latin America tells ITR about her fervent belief in equal access to the law, loving yoga, and paternal inspirations
Tax expert Craig Hillier agrees with the comparison of pillar two to using a sledgehammer to crack a nut
The amount is reported to be up 57% from the £5.6bn that the UK tax agency believes was underpaid in the previous year
Gift this article