Osborne vows to cut corporation tax
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George Osborne yesterday said he would lower the headline rate of corporation tax, taking steps to attract companies who have quit Britain for tax reasons.
Speaking last night at the annual CBI dinner, Osborne unveiled a five year plan to overhaul the corporation tax system but promised to protect manufacturing allowances.
However, he failed to give firm assurances of the level to which corporation tax would fall, prompting concerns that the coalition Government will not stick to cuts pledged in the Conservatives’ general election manifesto. This had promised initial cuts in the headline rate of corporation tax from 28p to 25p and in the small companies rate from 21p to 20p.
Referring to the Lib-Con coalition agreement due to be published later today, Osborne said: “We will reform the corporate tax system by simplifying reliefs and allowances and tackling avoidance in order to reduce headline rates.”
Lib Dem business secretary Vince Cable has put pressure on the chancellor not to cut certain manufacturing allowances, warning that the industry would struggle.
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