HM Treasury
 Printable version
|
 E-mail this to a friend
|
Corporation Tax Reform: Delivering a more competitive system
The Government has today published details of its Corporate Tax Reform programme consisting of a series of essential reforms designed to improve the UK's tax competitiveness. Measures include the introduction of new Controlled Foreign Company (CFC) rules and a commitment to introduce a Patent Box.
The Government wants Britain to be a place for businesses to invest. That is why the June Budget announced the reduction of Corporation Tax for large and small businesses with a cut in the main rate from 28% to 24% over the next 4 years and a reduction in the small profits rate from 21% to 20% from April 2011.
However, the Government recognises that a competitive corporate tax system is not just about rates. That is why the Government has published the document 'Corporate Tax Reform: delivering a more competitive system'. This document is designed to provide certainty to business over the Government's plans, as it works with them to deliver this ambitious programme of reforms.
Today's tax reform announcements include:
* a
Corporate Tax Road Map that commits to principles that will
underpin these reforms and a clear timetable to deliver these
changes, including how the Government will engage with business at
each stage of policy development;
* details on how the Government will reform the UK's outdated Controlled Foreign Company (CFC) rules by introducing more targeted rules in 2012 and how they will apply to financing and intellectual property. As a first step to make the rules more competitive, a package of interim improvements will be introduced in 2011;
* introducing a Patent Box in April 2013 - a 10% CT rate on profits from patents, reaffirming the Government's commitment to retain and build on the existing Research and Development (R&D) tax credit scheme to create the right environment for innovative companies to prosper
* a commitment to legislate an opt-in exemption for profits earned in foreign branches of UK companies in 2011. Under this more territorial approach, companies in the new regime will no longer be subject to UK CT on their foreign branch profits.
This programme demonstrates the Government's commitment to a competitive and stable tax system which provides business with the confidence to expand and invest in the UK in the years ahead.
The Exchequer Secretary to the Treasury, David Gauke MP said:
"In recent years, too many businesses have left the UK amid concerns over tax competitiveness. It's time to reverse this trend. Our tax system was once viewed as an asset. And it needs to be an asset again.
"That is why the Government is prioritising corporate tax reform. Responding to the concerns of business, the UK is headed for a more competitive, simpler, and more stable tax system in the future, creating the right conditions for investment"
Notes for Editors
1. The document published today can be accessed on the HMT Corporate Tax Reform website: http://www.hm-treasury.gov.uk/corporate_tax_reform.htm.
2. Details on the CFC consultation that the Government committed to at the June Budget, can be accessed at the following website:
http://www.hmtreasury.gov.uk/controlled_foreign_companies.htm.
3. Details on the foreign branches consultation, that the Government committed to at the June Budget, can be accessed at the following website: http://www.hm-treasury.gov.uk/consult_taxation_of_foreign_branches.htm.
4. The Patent Box and R&D tax credits consultations are formally launched for the first time today. Details can be accessed at the following websites: http://www.hm-treasury.gov.uk/consult_randd_tax_credits.htm and http://www.hm-treasury.gov.uk/consult_patent_box.htm.
Non-media enquiries should be addressed to the Treasury
Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to
public.enquiries@hm-treasury.gov.uk
This Press Release and other Treasury publications are
available on the HM Treasury website
hm-treasury.gov.uk For
the latest information from HM Treasury you can subscribe to our
RSS feeds or email service.
Media enquiries should be addressed to the Treasury Press Office on 020 7270 5238.
Contacts:
HM Treasury Press Office
Phone: 020 7270 5238
NDS.HMT@coi.gsi.gov.uk
