Recommitment to lowest corporation tax in G20 welcome but rate unlikely to fall below 17% despite Trump’s pledge of 15%
23 November 2016
Chris Sanger, Head of Tax Policy at EY, comments:
“The Chancellor’s recommitment to ensuring the UK will have the lowest overall corporation tax rate in the G20 may have felt like old news, given the PM’s statement on Monday. However, in describing this as the “overall rate” the Chancellor left himself room to avoid dropping below 17%, even if the US drops to 15% as promised by Donald Trump. The use of “overall” allows the inclusion of US state taxes, meaning that the UK rate could still pass this test.
“While any drop in corporation tax is always sure to be a headline grabber, most businesses want the Government to shift its focus onto reducing the employment tax burden. However, all we saw today was a slight increase to employers National Insurance Contributions – so no help there in offsetting the costs of the apprenticeship levy.”