It was announced this week that George Osborne has pledged to cut corporation tax. This move was following the Brexit vote, and it is hoped that it would encourage businesses to continue investing in the UK. At Finnies, one of our specialities is working with businesses and so we’ve decided to bring you an analysis of the announcement and answer any questions you might have about the proposed cut. Back in March, Mr. Osbourne announced that corporation tax would fall to 17% by 2020, however his announcement this week pledged that it would be cut from 20% to just 15%, making it one of the lowest corporation tax rates of any major developed economy. How would the cut impact my business? The proposed cut has been argued as a way to create a “super-competitive economy” with low business taxes. It’s been suggested that the cut would encourage businesses and investors from across the UK and overseas to continue investing their money into the UK. The 5% cut also suggests that businesses looking to invest in Britain may find it more appealing to do so, as the UK would also be cushioned by a decent infrastructure and resources. Does the cut boost receipts? In the past, tax cuts have led to a rise in government income alongside growth in the overall economy. This growth has more than offset the relative decline in tax, and according to official figures in 1985, corporation tax receipts made up more than 4% of the overall GDP. This has since declined only 2.5%. A recent paper by the US Federal Reserve challenged the idea that local state tax cuts increased employment during times of growth – but said a reduction can help protect jobs during a recession. When is the cut likely to be introduced? The Chancellor currently hasn’t given any details on when the plans to cut would be introduced, however it has been suggested that the UK should make the change quickly. However, we will make sure to keep you updated on this subject and bring you more information as it develops. If you have any concerns about your business and would like to know more, please feel free to contact or expert, Neil Tomlin, on 01482 861919 or email email@example.com.