UK Chancellor George Osborne has announced that the nation’s corporation tax rate will be cut significantly, to encourage investors to do business in Britain. Turner Little comments.
Corporation tax
If you establish a limited company, you can ensure that your personal assets are somewhat protected if your business encounters adverse circumstances. However, there are a number of responsibilities attached to company directorship, such as filing and executing corporation tax payments.
Under UK law, your firm must pay corporation tax on the profits accrued from conducting business as a limited company. The current corporation tax rate is 20%, however when announcing the 2016 budget in April, Osborne stated that the corporation tax rate would fall to 17% by 2020.
Super competitive economy
Business portal Start-ups reports that recently, Osborne announced that the UK’s corporation tax would be lowered to under 15%; a minimum reduction of 5% from the present rate. Osborne made this revelation while outlining his new five point economic plan to the Financial Times.
This plan is designed to assure investors understand that the UK is still “open for business,” following its recent vote to leave the EU (commonly referred to as ‘Brexit). Elaborating, the Chancellor said that he is determined to build “super competitive economy” and that in the aftermath of the Brexit vote, “we must make the most of the hand we’ve been dealt.”
Osborne stated that he wants the UK to have the lowest corporation tax rate of any major global economy, to persuade international investors to flock to British shores. Other strategies included in the plan are maintaining the UK’s fiscal credibility, investing in the country’s Northern Powerhouse, implementing efforts to increase Chinese investment and ensuring support for bank lending.
Beneficial for businesses
Commenting on this news, Start-ups writes: “The rate will likely be good news to businesses, not only for the cost-savings associated to the lower rate, but also in attracting more inward investment.” In other words, the lower corporation tax could allow you to create and maintain a limited company more cost-effectively, as well as attract more start-up and expansion investment. If you wish to capitalise on this development, Turner Little provides the limited company formation services you need to start a business effectively in the UK.
Turner Little
Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agent, Registered Bank Intermediaries and Business Consultants, as well as Trust provider. You can receive our monthly newsletter by signing up using the form below.
