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Osborne Pledges To Cut Corporation Tax

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The chancellor’s five-point plan to avert a DIY recession

By cutting corporation tax to below 15%, Britain would be competing with countries such as Ireland, where corporation tax is 12.5%.

As well as lowering corporation tax, the chancellor said his five-point plan included ensuring support for bank lending; a push for more investment in China; a focus on delivering the northern powerhouse: and maintaining Britain’s fiscal credibility.

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He can say whatever he likes, surely he's gone when the next Tory leader is in place! Maybe they could find him a job of looking after the petty cash box as it suits his knowledge of treating the economy as a household budget. Or a job as a lollipop man outside the Houses of Parliament, as he loves a high viz jacket!

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99% of small business owners aren't rich. I'm not sure why the negativity over this, he was due to cut it to 17pc anyway. Plus no time frame has been given so doubt it'll go anywhere.

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The chancellor’s five-point plan to avert a DIY recession

By cutting corporation tax to below 15%, Britain would be competing with countries such as Ireland, where corporation tax is 12.5%.

As well as lowering corporation tax, the chancellor said his five-point plan included ensuring support for bank lending; a push for more investment in China; a focus on delivering the northern powerhouse: and maintaining Britain’s fiscal credibility.

The fact the EU allows different member states to compete against each other on corporation tax rates is one of the reasons it is falling apart. Ditto the idea that a state can be a member of the EU but somehow 'neutral' in international relations. It is riddled with these contradictions.

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Seems a bit strange, to me anyway, for this story to break on a Sunday. All cleared with Treasury last week, or senior Treasury staff working weekends to offer something sweeter/calming for market as we go into a new week?

I glanced at the FT article (published 6 hours ago).

They cover something I was already thinking. Undercutting competing economies. Although not quite as low as Corporation Tax in Ireland, but UK having other advantages to presence for some companies imo.

A suggestion the move may not be well received by EU finance ministers. For reasons you can speculate on. I guess they all look to their own tax-raising base.

Reuters also... http://www.reuters.com/article/us-britaineurope-tax-idUSKCN0ZJ0MG

A further step in that direction would really turn the UK into a tax haven type of economy," he said, adding that there were practical and domestic political barriers to doing this.

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Sneaky...Trying to claim credit for one of the positives of brexit .. or worse.. reducing the potential upside.. corporations don't need the incentive.. in fact to sell in britain, they will have to move UK operations to be based and pay tax in UK following brexit anyway

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Does it also include landlords who've incorporated? Are they going to scrap all of the anti-BTL tax changes in order to try and boost the housing market?

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I think this is likely more Osborne talking up the economy with a 'potential' drop in Corporation Tax to 15%, so to try and settle the jitters of companies potentially looking at moving out of the UK.. whether it will actually happen is likely anyone's guess.

So think this is more confidence building, rather than policy setting - particularly as he is unlikely to be chancellor in a few months..

(although I think him and May seem reasonably pally)

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Actually thinking on, I think I would make a prediction that if May wins (which I think she will) then I think she will keep Osborne as a Continuity Chancellor for the first 1 or 2 years of her leadership. Think every step possible will be taken to avoid spooking business.

Then again, I am utterly hopeless at predictions.

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As mentioned above, there are so many ways to avoid paying corp tax that this measure in itself won't do that much... I doubt there will be any attempts to reduce VAT. But hey it's the public that pays that particular tax..

Wasn't VAT introduced when we joined the Common Market? (replacing "purchase tax")

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IIRC one of the Scottish Independence campaigns promises was to lower corp. tax to attract business to relocate from England to Scotland. I think this is a partly pre-emptive strike to shoot their fox.

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Why bother taxing them at all? They avoid the tax anyway.......

The fact some corporations can minimise tax through cross-border arbitrage (putting others at a disadvantage) is kind-of why corporation tax is unfit for purpose in the modern world.

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99% of small business owners aren't rich. I'm not sure why the negativity over this, he was due to cut it to 17pc anyway. Plus no time frame has been given so doubt it'll go anywhere.

He had expressed the long-term intention of cutting it further.

I guess this announcement now is a reminder of that. Jam tomorrow if you invest here today ...

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