Planned hike in corporation tax set to blow £67bn hole in Britain’s business budgets and bosses fear it may tip economy into recession
A planned hike in corporation tax is set to blow a £67billion hole in Britain’s business budgets and bosses fear it may tip the economy into recession.
The increase from 19 per cent to 25 per cent from next April will take the levy to its highest level since 1989.
Blow: Some have argued that corporation tax should be slashed – perhaps to as little as 12.5 per cent – rather than increased
The ‘damaging’ rise, revealed in Office for Budget Responsibility figures, has been fiercely opposed by hotelier Sir Rocco Forte, investment guru Sir Paul Marshall, pub boss Tim Martin, advertising tycoon Sir Martin Sorrell, former NatWest chairman Sir Philip Hampton, and ex-Pizza Express boss Hugh Osmond.
Some have argued that the tax should be slashed – perhaps to as little as 12.5 per cent – rather than increased.
A reduction would attract more overseas investment and give the economy a vital shot in the arm, helping to prevent growth from stalling and inflation spiralling out of control.
The huge sum which would be raised by the proposed hike dwarfs even the £47billion which Chancellor Rishi Sunak expects to receive from freezing income tax thresholds over the next five years.