Slashed corporation tax ‘will show Britain means business’

Chancellor George Osborne wants to slash corporation tax as part of moves to show companies around the world that Britain is "open for business".

Corporation tax will be cut next year to 27%, and by one percentage point annually for the next three years, taking it down to 24%.

Osborne said this would represent "the lowest rate of corporation tax in the western world and the lowest rate this country has ever seen".

Accountants agree the move will appeal to large companies and could persuade them to move to the UK, providing employment and potentially increasing government tax revenue. It will do little for the small entrepreneur, however, they warn.

Andrew Robinson, associate director of Grant Thornton, said: "It is appealing to large companies rather than small ones. If you are a small business with turnover of, say, £100,000 a year, you don't want to incorporate. You want to get money out of the company."

He added: "They are trying to encourage people that would otherwise set up on their own to incorporate."

The Chancellor said that reform of the corporate tax regime "will help rebalance the economy away from household debt and government consumption".