Budget 2016: Corporation tax reduced to 17% by 2020
16th March 2016 | News
Chancellor, George Osborne has pledged to reduce corporation taxation to 17 per cent by the end of this parliament in 2020 in this afternoon’s Budget to the House of Commons.
The move will be partly funded by recouping tax owed from multinationals, as part of big plans to help the “millions of firms who pay their fair tax”.
The Chancellor pledged to “get rid of loopholes for multinationals and tax for small businesses” whilst targeting the global conglomerates that “deliberately over-borrow in the UK”.
From April 2017, Osborne will limit interest deductibility for the largest companies at 30 per cent of UK earnings, whilst setting new “hybrid mismatch rules to stop the complex structures that allow some multinationals to avoid paying tax anywhere, or to deduct the same expenses in more than one country”.
Osborne reiterated that the Conservatives were a government who “lower tax” as opposed to raising it; unveiling a host of measures to tackle tax avoidance by the one per cent of companies with profits of £5m or greater.
It’s hoped that this alone would raise an additional £9bn for the Treasury, enabling the Chancellor to subsequently reduce corporation tax.
“Britain is blazing a trail. Let the rest of the world catch up,” said Osborne.
“All of these reforms to corporation tax will help create a modern tax code that better reflects the reality of the global economy.”
For a full summary of this afternoon's Budget 2016 and the highlights that relate to the UK's small business community click here.