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Civitas report calls for reduction of corporation tax to 15% by 2020

C-Home-UK-flag-girder A Civitas report, authored by Corin Taylor and Richard Bacon, calls for corporation tax to be cut to 15% over the next ten years.

The report points to an independent survey that finds a significant risk of business flight because of Britain's increasingly uncompetitive tax regime:

"KPMG's most recent annual survey on the UK's tax competitiveness found the proportion of groups surveyed that were actively considering leaving the UK had more than doubled, from 6% the previous year to 14%. Of the 20 FTSE 100 companies surveyed in November 2009, four were actively considering moving."

Britain has become increasingly uncompetitive since 2000:

"A 2000 survey of corporation tax rates across 86 countries worldwide found that the average corporation tax rate was 31.1%, above the UK's rate of 30% in that year. In 2009, the average rate across the 116 countries surveyed was just 24.2%. The UK headline rate is 28%... Out of the 86 countries surveyed worldwide, the UK had the joint 29th lowest corporation tax rate in 2000. In 2009, the UK's rate was the 68th lowest out of the 116 countries surveyed."

Bacon and Taylor estimate that the cost of a 15% corporation tax would be between £12.4bn and £

Responding to the report Shadow Treasury Minister David Gauke said:

'This report is further evidence that Labour has failed to keep our corporate tax system competitive.  It is vital that we reverse this decline and get the country back on its feet.  One of the benchmarks we are going to ask the British people to judge us on is whether we improve the UK's rating for tax competitiveness.  As a start, we will cut the corporation tax rate from 28p to 25p and our ambition is to have the most competitive corporate tax environment in the G20."

We've emphasised those final words. They are quite an ambition but fit with what ConHome has been saying George Osborne is planning.

More here on the Civitas report.


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