Hints on corporate tax cuts

Business and Enterprise Minister Matthew Hancock hinted this week that Chancellor George Osborne is contemplating lowering corporate taxes even further as he puts the finishing touches to next week’s Budget, the last before May’s General Election.

According to Mr Hancock, taxes must be cut in order to boost business but he admitted that the Liberal Democrats are blocking Conservative plans for a radical Budget on March 18 that could assist with this. However, he stressed that his party wants the UK to be the “best place in the world to start and grow a business”, describing the Labour party as the “butchers of business”.

Despite this, Mr Hancock said that the Government has made a lot of progress, with corporation tax already coming down next month when the main rate will fall from 21 per cent to 20 per cent. However, while the country will have the lowest corporation tax in the G20, it is still not as low as some of its neighbours, such as Ireland. At this point he hinted that the tax could be cut further when he said that he could not make any promises but that people could “clearly see the direction of travel”.

Meanwhile, Mr Osborne has already revealed that he will reveal details of a new crackdown on tax avoidance by multinationals, such as Google, in the Budget and it is believed that he will fund any tax cuts through the money this will bring in.

Earlier this month, the Institute of Fiscal Studies (IFS) also suggested that cutting corporate taxes could boost the economy.