Former Chancellors argue against corporation tax hike

Three of his predecessors have warned Chancellor Jeremy Hunt that going ahead with a planned increase in corporation tax would be a mistake. Lord Hammond said he was “disappointed” with the upcoming increase from 19% to 25%, saying: “My view on corporation tax is always that it’s better to have lower than higher.” Meanwhile, Kwasi Kwarteng said the increase would not help the UK to become more competitive, arguing: “We have got to look at ways to improve our attractiveness to foreign investors.” Separately, George Osborne has urged Mr Hunt to cut business taxes in next month’s Budget to boost the economy. Elsewhere, the Federation of Small Businesses has said the increase to 25% would be disastrous for limited company directors, with spokesman Craig Beaumont saying: “People think corporation tax is only an issue for big businesses – but when we speak to our members and ask what they need help with, corporation tax is top of the list.” He added: “If you want the economy to bounce back, one way of not doing that is making it harder for small business owners.” Research by consultancy Europe Economics for the Taxpayers’ Alliance modelled the impact of the planned rise in corporation tax on growth, finding that it could result in a £30.2bn – or 0.9% – reduction in economic growth over 10 years.

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The Sunday Telegraph

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