Corporation Tax
The question
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of decreasing corporation tax to the lowest level in Europe.
Answered by James Murray
At the Budget the Government published a roadmap setting out its corporate tax policy for the parliament, providing the stability needed for businesses to make long term investments and support our growth mission.
The roadmap confirmed that the main rate will be capped at 25% – the lowest in the G7 - for the duration of the parliament. This headline rate is supplemented by some of the most generous business investment tax reliefs and allowances in the OECD. The roadmap also commits to monitoring international developments with a view to ensuring that the UK remains competitive.
The Office for Budget Responsibility regularly updates its forecast Corporation Tax revenues. The most recent is here: Economic and fiscal outlook – October 2024 - Office for Budget Responsibility. These forecasts assess announced policy, but HMRC also publishes “ready reckoners” showing the impact of illustrative tax changes, including to Corporation Tax: Direct effects of illustrative tax changes bulletin (January 2025) - GOV.UK.
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