Corporation tax

A minimum corporation tax is nothing to celebrate

So is this what the new era of global co-operation looks like? The EU has agreed to delay the introduction of its proposed digital levy until the autumn to allow negotiations for a global minimum corporation tax. Biden had demanded that the digital tax be dropped, seeing it as a direct attack on US tech giants. In other words, the EU appears keen to compromise in the face of US pressure — something that it would have been less likely to do under Donald Trump. The move makes it more likely that a global minimum corporation tax of 15 per cent will now become reality. Is that a cause to

The hidden costs of the G7 tax deal

Calls to reform corporation tax are nothing new and don’t just come from the left. The inefficient and bureaucratic nature of the tax has been highlighted by free-market advocates for years, as it becomes increasingly obvious that, in the age of multinationals and digital tech giants, the structure is no longer fit for purpose. Action is now being taken. This afternoon the advanced economies which form the G7 agreed a new structure for taxing big corporations. The historic deal will see a major shift in the way companies are taxed: away from the existing model in which they are taxed in accordance with where their product is created to a new

Why Rishi Sunak is hiking corporation tax

It might seem a strange thing to say about a Chancellor who is presiding over an annual deficit of £355 billion, but Rishi Sunak is a fiscal conservative. This is what explains his decision to hike corporation tax to 25p in 2023. He thinks that this move is necessary to begin to put the public finances on a sounder footing. The increase in corporation tax is offset by the so-called ‘super deduction’. This allows companies to write off 130 per cent of the cost of an investment against tax for the next two years. The aim is to try and boost investment and help address this country’s long-standing productivity problems.

The Budget could be an awkward moment for fiscal conservatives

There is no getting around the fact that these are awkward times for fiscal conservatives, such as myself. It has never been harder to make the case for lower taxes. We have the largest national debt for half a century as we come out of the worst recession for three hundred years, with zero political appetite for public spending cuts. It is essential – for both the Conservative party’s political prospects and the country’s economic prospects – that the UK retain our reputation for sound finance. This is why the Treasury Select Committee have been gathering evidence on the options for tax after coronavirus, with our recommendations to be published

Are the Tories about to ditch one of their biggest policy achievements?

We already know much of what will be in Rishi Sunak’s Budget next week. Another £30bn for Covid-relief measures: furlough scheme into the summer, stamp duty holiday and the uplift in universal credit (which is also expected to be time-limited, despite pressure from the opposition to make a permanent adjustment). But this year’s spending splurges are becoming a footnote in a Budget dominated by the prospect of tax rises, for which the Chancellor is already receiving backlash from the left and right. Rumours of a corporation tax hike, circling for a week now, have not been denied. There’s also talk of capital gains tax coming under the Treasury’s spotlight, with