Fair dues: Rebalancing business taxation in the UK

Article

Over the last decade a substantial reduction in the effective rate of corporation tax has been accompanied by a rise in employers’ national insurance contributions. At the same time there has been increasing public focus on corporate tax avoidance, both through the use of accounting procedures to minimise tax paid in different national jurisdictions and through tax havens.

This policy paper argues for a rebalancing of the business taxation system. It sets out a series of reforms aimed at achieving a fairer burden of taxation between different kinds of businesses and taxpayers, while supporting employment, wages and investment. It proposes a fiscally-neutral increase in the rate of corporation tax, alongside a reduction in employers’ national insurance contributions; and an increase in the base for corporation tax through a simplification and reduction in reliefs and allowances. It also proposes the introduction of an Alternative Minimum
Corporation Tax in order to reduce profit shifting by multinational corporations, alongside greater support for international efforts to combat tax avoidance.

Related items

  1. Wide angle view directly up in the skyline of the financial district in central London

    Fair play: How competition policy can drive growth

    The UK’s competition framework — and its regulator, the Competition and Markets Authority — has struggled to prevent rising market concentration and stagnant productivity. 

  2. From bystander to builder: government guidance will be essential for industry to thrive 

    Global political attention remains fixed on Washington. US president Donald Trump’s tariffs (and the circling threat of new tariffs) are challenging the global economic order and throwing governments into chaos. Intensifying economic…
  3. Doncaster town centre clock tower

    Accountability matters: Securing the future of devolution

    English local government faces major reshaping.