Commenting on Liz Truss’ Corporation Tax U-turn

Commenting on Liz Truss’ corporation tax U-turn, Managing Director at Alvarez and Marsal, said:

“At the time of the now infamous “mini budget”, it looked likely that the UK Corporation Tax rate cut would be revisited. The expectation was for a middle ground between the current and proposed rate. The increase from 19% to 25% seemed quite high, but the reality remains that the new rate will not be a hugely significant deciding factor on whether businesses want to establish and grow in the UK. It is therefore not surprising that the rate cut has now been reversed.

Corporation Tax is one of the tax costs businesses have to consider, but the rate does not take into account that some sectors could really benefit from targeted support whilst others are doing well, even in the current environment. More targeted measures like support for green initiatives and capital allowances would be more effective in driving investment and growing the economy.”