UK Budget: Corporation tax to be cut to 18pc in 2020
Published 08/07/2015 | 07:51
The UK's corporation tax rate will fall to 18pc in 2020, UK Chancellor George Osborne has announced.
The current rate stands at 20pc, compared with Ireland's 12.5pc.
Mr Osborne today delivered his second Budget statement in four months, but it is his first since the Conservatives secured an overall majority in May's election.
The Chancellor said the UK's corporation tax rate will fall to 19pc in 2017, and 18pc in 2020.
"18pc rate of corporation tax sends out loud and clear the message around the world that Britain is open for business," Mr Osborne said.
The Chancellor also said more funds would be put into dealing with tax evasion and avoidance.
George Osborne sweetened the pill of dramatic welfare curbs with tax cuts as he promises reforms to "secure Britain's future" in the budget.
In steps that drew cheers from Conservative lawmakers and a smile from Cameron, Osborne raised the amount of earnings that are exempt from income tax to 11,000 pounds from next year and the inheritance tax threshold on family homes to the 1 million pound mark.
Osborne said the economy was forecast to grow 2.4 percent this year, down from an earlier forecast of 2.5 percent, and 2.3 percent next year, unchanged from an earlier forecast, a rate he said was faster than other major industrialised countries.
Britain's budget deficit of nearly 5 percent of economic output in the 12 months to March is one of the biggest among rich economies.
Osborne pushed the target of achieving a budget surplus into the 2019/20 financial year from the 2018/19 financial year as projected under his previous budget plan.
Osborne, who has previously said he wants to tackle Britain's hefty bill for tax rebates to low-paid workers, said he would freeze working-age benefits for four years.
"The benefits system should not support lifestyles and rents that are not available to the taxpayers who pay for that system," he said
Osborne is hoping that a recovery in earnings from the effects of the financial crisis will continue in the coming years, helping to offset the loss to incomes from tighter welfare spending.
Turning his focus to the wealthy, Osborne said Britain would abolish the permanent non-domiciled tax status which many rich foreigners had used to reduce their UK tax bill.
The share price of firms associated with the housing market - such as property website Zoopla and house builders Crest Nicholson, Foxtons and Berkeley - fell after the non-dom tax change.
Osborne also pledged to gradually reduce the bank levy rate, though he said he would introduce a new 8 percent surcharge on bank profits.