Chancellor Rishi Sunak said hes confident the U.K. will remain an attractive place to do business after his plans to raise taxes on corporate profits were attacked by business groups and members of his own Conservative Party.
Britain will still have one of the lowest corporation tax rates among Group of 20 nations, Sunak told the cross-party Treasury Committee on Thursday. Moreover, businesses would factor in the full range of taxes and reliefs, as well as skills, infrastructure and research and development incentives.
If you look at the shop window as a whole, there are lots of things in there, lots of goodies that will just make sure that this is a really attractive place to come and do business, Sunak said. Im confident that will be the case, even at a slightly higher rate.
Sunaks announcement that he intends to raise the main rate of corporation tax to 25% in 2023, from 19%, was the centerpiece of a budget last week that sought to plug the vast hole in the public finances left by the pandemic. The increase, if implemented, would be the first since 1974.
George Osborne, who slashed corporation tax as Tory chancellor between 2010 and 2016, said this week that Sunaks move sent a
message around the world that Britain is not a particularly enterprising or pro-business place at a time when investment is needed in the wake of Brexit and the coronavirus pandemic.
The Confederation of British Industry said the planned hike will cause a sharp intake of breath for many businesses and sends a worrying signal to those planning to invest in the U.K.
Sunak also suggested he may publish new fiscal rules to guide his tax and spending decisions toward the end of the year.
He indicated they are likely to seek a balanced budget on day-to-day spending, a stable or declining debt burden and something around the affordability of debt repayments.
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