Gordon's last budget

Stifle the yawn. Out of the mass of impenetrable economic and financial detail that was delivered by Chancellor Brown on Wednesday came news of the 2p cut in corporation tax.

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Last Updated: 31 Aug 2010
Lobbied heavily by business and goaded by the Conservatives, who wanted a bigger reduction, the Government finally capitulated and cut corporation tax. The change will take effect from next year, but until then, the UK's will remain the seventh-highest rate in the EU. This compares to a much lower 12.5% in Ireland, where credit-checking company Experian recently relocated its head office.

Like Brown's tit-for-tat trading in income tax, the cut in corporation tax will be funded by a raised tax rate for small companies from 19% to 22% - something readers of MT's new SME magazine accelerator won't be too thrilled about. Brown wants to clamp down on self-employed people - one-man bands - exploiting the rule to avoid paying higher personal tax. But many legitimate small business owners will have gone to bed with an aspirin last night, their money headache having got the better of them.

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