Further to the news that the government has rejected calls by senior Conservative MPs to scrap a planned rise in corporation tax, Miles Dean, Head of International Tax at Andersen LLP has been sharing his reaction with Wealth DFM commenting:
“The Government appears bereft of any pro-growth ideas, simply sticking to the notion that hiking the CT rate to 25% will make a difference. The reality is that the PM and his cabinet are out of touch with what the UK needs to kickstart growth. Increasing taxes has never and will never work. It’s counter-intuitive and counter productive.
“One of the potential benefits of Brexit – the ability to set our own tax rates – has been squandered, not just by Sunak but also by Johnson (who had even less commercial instincts than Sunak). Increasing the CT rate sends completely the wrong message – to the country but also internationally, but flip-flopping, dithering and tinkering on the edges is even worse.
“The Government is too scared of how a volte-face may be perceived by the public, that it benefits supposedly evil corporates. Whatever he does, it will be too little too late – the Tories are toast at the next GE. Bereft of ideas, commercial instinct and above all spine.
“According to estimates from the 2021 Budget report, the new rates of corporation tax are meant to raise £11.9 billion in 2023/24, rising to £17.2 billion in 2025/26. These estimates are sincerely optimistic at best, but more likely deliberately delusional. The corporation tax rise will also likely further heighten inflation, which has already reached historic levels. The Government is sending the message that we’re simply not pro-growth, but rather pro-tax.”