Chancellor George Osborne has confirmed corporation tax will be cut to 24 per cent next month.
Giving his Budget speech today, the Chancellor said corporation tax will fall from 26 per cent to 24 per cent next month, rather than the planned reduction to 25 per cent.
Osborne confirmed corporation tax would then be cut to 22 per cent in 2014.
He called it the “biggest sustained reduction in business tax rates for a generation. A headline rate that is not just lower than our competitors but dramatically lower.”
He added this means corporation tax will be 18 per cent lower than in the US, 16 per cent lower than Japan, 12 per cent lower than France and 8 per cent lower than Germany.
Osborne also said the bank levy would be increased to 0.105 per cent from January so that banks do not benefit from the cut in corporation tax. This, he said, would allow the Treasury to collect the £2.5bn in revenue it expected to get from the bank levy.
In last year’s Autumn statement, Osborne increased the bank levy from 0.075 per cent to 0.088 per cent