George Osborne pledges to slash corporation tax in post-Brexit boost

Tax cut: George Osborne has vowed to slash corporation tax
PA
Tom Marshall4 July 2016
WEST END FINAL

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George Osborne has pledged to slash corporation tax in a bid to give Britain’s economy a post-Brexit boost.

The chancellor is proposing to cut the tax to less than 15 per cent to show the UK is "still open for business" following the vote to leave the European Union.

It would mean slicing more than 5 per cent off the current 20 per cent rate.

Mr Osborne told the Financial Times: "We must focus on the horizon and the journey ahead and make the most of the hand we've been dealt."

The move would give the UK the lowest corporation tax of any major economy and bring it close to the Republic of Ireland’s 12.5 per cent rate.

Mr Osborne said it was part of his plan to make the UK a “super-competitive economy” as the country faces a “very challenging time”.

He did not indicate when the cut might take effect, saying he would wait for official forecasts before announcing any new measures.

He has previously announced plans to cut the tax to 17 per cent in 2020. The main rate of corporation tax has fallen from 28 per cent since Mr Osborne became chancellor in 2010.

Shadow chancellor John McDonnell said Mr Osborne’s plan to take the rate below 15 per cent was “counter-productive” and could harm the UK’s prospects of getting the best deal in its Brexit negotiations with the rest of the EU.

He told the BBC: “I don't think it sends the right message to those countries that wish to establish a co-operative relationship with us in the future, so that we get some of the benefits we had in the EU, even though we're outside of it."

He added: "You are creating us almost as a European tax haven and I think that will undermine our negotiations for a constructive way forward in Europe."

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