For immediate release
New TaxPayers’ Alliance (TPA) analysis of OECD data has found that tax changes in today’s budget will make corporate tax rates higher than those in France. This is despite claims that corporation tax rates will still be the lowest in the G7.
Research shows the effective marginal rate in the UK, or the rate actually paid once reliefs are taken in account, could be 17.9 per cent after 2023. This would be the highest among G7 and BRIC countries, including France, China and India. France has cut its headline rate from 31 per cent to 26.5 per cent in 2021, reducing their effective marginal rate of 16.7 per cent.
Today, the chancellor announced increases to the UK’s headline rate of corporation tax, as well as new reliefs including a ‘super deduction’ on business investment. The rise from 19 per cent to 25 per cent corporation tax from 2023 takes the UK headline rate to the same as China, though reliefs mean the effective marginal rate actually paid by companies in Britain will be higher than those paid by Chinese firms.
The TPA has welcomed the super deduction as a jump-start for investment, but warned the sudden rise in the headline rate will hammer Britain’s big employers at a time when millions are on the verge of unemployment.
John O’Connell, chief executive of the TaxPayers' Alliance, said:
"With the hikes announced today, British businesses will be facing unprecedented marginal tax rates.
“While Rishi was right to offer reliefs to sweeten the pill, these figures lay bare the impact that headline rate changes will have on actual levels of tax paid by our biggest employers.
“Big tax hikes risk choking off the recovery before it has even started, so let’s hope that other measures in the budget help to boost jobs, spur investment and ultimately revive the economy.”
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Media Campaign Manager, TaxPayers' Alliance
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Notes to editors:
Founded in 2004 by Matthew Elliott and Andrew Allum, the TaxPayers' Alliance (TPA) campaigns to reform taxes and public services, cut waste and speak up for British taxpayers. Find out more at www.taxpayersalliance.com.
TaxPayers' Alliance's advisory council.
- The TaxPayers’ Alliance response to the budget can be found here.