Cheer for firms as tax to be cut faster

The Government will reduce the 28 per cent rate by two per cent from April, a doubling of the previously announced pace of reduction. The rate will continue to fall by 1 per cent over each of the following three years – taking corporate tax down to 23 per cent.

This is 16 per cent lower than America, 11 per cent lower than France and 7 per cent lower than Germany, giving the UK the lowest corporation tax rate in the G7, said Chancellor George Osborne.

He added: “Let it be heard clearly around the world – from Shanghai to Seattle, and from Stuttgart to Sao Paolo: Britain is open for business.”

IoD director general Miles Templeman said the reduction would “help to lift business confidence at a difficult time”, while the CBI said the extra 1p cut would help firms increase investment.

Richard Williams, tax partner at Deloitte, said the move would increase the attractiveness of the UK as a place for foreign investment.

The Chancellor also announced plans to reform rules governing controlled foreign companies, which media group WPP and building supplier Wolseley blamed for their decision to quit the UK.

Mr Williams said the reforms could benefit the hundreds of Yorkshire companies with overseas operations.