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Corporation tax cut to be introduced slowly

Corporation tax cut to be introduced slowly

The proposed cuts in corporation tax could be staggered over the next five years suggests Lord Sassoon, the commercial secretary to the Treasury.

The government is committed to lower and simpler taxes and as part of this plan they intend to reduce corporation tax to 25% from the current 28%.

Lord Sassoon said that George Osborne would be setting out a roadmap for tax reform when he presents his emergency budget on 22 June. This will include the coalition’s plan to make our rate of corporation tax for limited company contractors the most competitive amongst the G20 countries.

Reducing the corporation tax rate by 3% would cost £4.5bn per year, but at least some of this could be recouped by tackling tax evasion and repealing tax relief schemes.

There are concerns however that this competitiveness may not extend to the banks. The chairman of Lloyd’s of London, Lord Levene, says that the coalition should be focusing on rebuilding the economy, and that will involve supporting the City. He is worried that re-balancing’ the economy is in reality a secret code meaning shrink the financial services sector.

Lord Levene is openly critical of George Osborne’s plans to impose a levy on banks. He highlighted the fact 44 of the 53 businesses that operate in the Lloyds insurance market are not domiciled in the UK and urged ministers not to attack the city in order to support manufacturing.

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Image: Tattooed snails 5/33 and 6/33 by {JooJoo}

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