11/10/2011

British corporation tax must be cut to 15 per cent by 2020, according to the Institute of Directors (IoD), or else the UK will continue to lose businesses and their tax revenues to more favourable foreign tax jurisdictions.

The call for the continued slashing of the rate of corporation tax was issued as part of the IoD's 15-point plan to bring the British economy back to a state of strong growth.

A decrease has already been implemented, with the rate lowered from 28 per cent to 26 per cent since last year, and it will be slashed to 23 per cent by 2015. The IoD has suggested a much deeper cutting of the rate, listing it as one of the "aggressive" proposals that ultimately aim to "make the UK one of the most competitive advanced economies in the world by 2020-25".

The plan was launched by new director-general of the IoD, Simon Walker, who said that the current government's deficit reduction plan was "a step in the right direction" but needed to move faster and further.

"No aspect of economic policy is more important than returning Britain to a growth trajectory," Mr Walker said. "Without the belief that UK economic growth is expanding, confidence will wane, international investment will dwindle and British consumers and taxpayers will be left picking up the crumbs at the tables of faster growing competitors."