Cutting taxes

My least favourite tax cut is a cut in Corporation tax. The best reason to cut Corporation Tax is to increase tax income by attracting more business to the UK to pay the tax. I prefer tax cuts that boost people’s take home pay, and tax cuts that remove or reduce taxes on transactions to encourage more activity. That way more people can fulfil their dreams.

Some of you have written in to say the PM cancelled or postponed the Corporation Tax cut from 19% to 17% in order to comply with EU policy to avoid tax competition between member states. I do not believe this. We are leaving the EU and will be able to follow our own domestic policy wishes on tax once we do. There is no need for the PM to go along with guidance from the EU on Corporation Tax and I have never heard him say he thinks he needs to in his various well publicised statements on tax.

It is true the EU has considerable power over our tax policies, with detailed controls on VAT and substantial influence on Corporation Tax through various court cases and decisions. They do not have the power to set our rate, and have put up with the Republic of Ireland setting an aggressively low rate to bid business away from the UK to headquarter and pay tax in the Republic.

So the issue is why did the PM change his mind? He has been persuaded that Corporation Tax is now at a low enough level to maximise the take, and that any further cut in rate would lose revenue. The Treasury have clearly told him they think a 2% cut would cut revenue by £6bn, which is a large sum given current budget pressures to spend more on various public services.

So the issue to debate is are the Treasury right this time on their tax forecast? It may be that some in the Treasury have other views that underlie this forecast, but they are all rightly protected by the doctrines of civil service neutrality and anonymity. It is for Ministers to appraise and cross examine these forecasts to see if they are likely to be right. I would be interested in your views about whether corporation tax revenue would indeed fall were the rate to be cut a bit more?

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144 Comments

  1. Peter Wood
    Posted November 20, 2019 at 5:16 am | Permalink

    Which is the BEST tax cut then?

    Surely increase the basic tax free allowance threshold. It helps the lowest paid and cuts the overall cost of collection.

    • Narrow Shoulders
      Posted November 20, 2019 at 7:57 am | Permalink

      There are already many people who don’t pay tax and yet get a vote on how it is spent.

      Better to reintroduce the 10p starting rate than to take people out completely.

      If you are looking to take people out completely then National Insurance thresholds are the place to start. There is no annual allowance, it is levied on each pay slip and is much lower than the tax threshold.

      • Lifelogic
        Posted November 20, 2019 at 8:32 am | Permalink

        Indeed, about 50% of households pay no net taxes at all, after taking off what they get back in immediate benefits. They are being asked if they want to vote for higher taxes (that they will not pay) and get free broadband, dentistry and lots of other Christmas presents that the dishonest Corbyn has promised them.

        Not of course that he would ever be able to deliver these in reality.

        Cutting corporation tax would encourage investment and encourage give higher pay but politically not many pay it directly and that is the political reason it has been chosen. The main taxes that are currently at totally idiotic levels are stamp duty at up to 15%, the taxes on rental profits not even being made, the pension savings mugging taxes, the IHT taxes at absurdly high levels and income tax levels. But the real problem is the government spending well over 40% of GDP this is just far too high. 25% or less is where it should be. Most of this is spent very inefficiently indeed and much of it provided no useful output or even does positive damage to the economy.

        On top of this we have the daft expensive energy agenda, the endless red tape, restrictive planning, daft employment laws, over complex taxation, the litigation culture and appalling public services too …. hardly any wonder growth and wage growth is so poor. The government is actively suffocating the productive.

        • Bob
          Posted November 20, 2019 at 3:48 pm | Permalink

          @LL
          Well said! Agree entirely.
          Mr Javid needs to look at the expense side of the equation and cut unnecessary costs, like overseas aid to other nuclear powers while confiscating the homes of British dementia sufferers.

          • Hope
            Posted November 20, 2019 at 8:08 pm | Permalink

            Johnson and agent Corbyn want to waste more of our taxes on the NHS, when it wasted over £30 billion on a failed computer system where no one was held to account. PFI wastes billions of NHS money by Labour and will continue to do so. What did Corbyn say about privatisation of NHS! Health tourism dropped under Hunt. Staffordshire scandal under Burnham a Health Secretary, no action. Who are these fools trying to kid?

      • Martin in Cardiff
        Posted November 20, 2019 at 8:40 am | Permalink

        Yes, all those cash-in-hand tradesmen, for instance.

        The cash economy in this country needs closer regulation.

        It is largely what supports the unknown number of clandestine migrants here for one thing.

        • Hope
          Posted November 20, 2019 at 9:36 am | Permalink

          Taxation should be at a minimum to provide public services and defence of this country. This is our money we could spend on what we want.

          JR you politicos speak as if it is your god damn given right to take as much from us as possible as it is inevitable! Your govt waters by the billions, yes billions, without any regard to where this money comes from.

          Your govt has taken taxation to a forty year high by stealth in all areas. Worse than the previous two Labour govts, against promises to get elected and against lies that your govt is a low tax Party! Bonfire of quangos still not happened nine years after it was promised to cut back on wasteful public department not serving much purpose. Start wit the Enviroment Agency. Look at its spending and use to the public. It could go tomorrow without any detrimental effect to society whatsoever. £1.5 billion saved.

          Johnson again confirming HS2! What a waste for a single railway journey that will be of extremely limited use to a small number of people! £100 billion could be saved or used to provide better transport.

          Tories are a party of taxation wasters. The govt record proves it.

          Reply I am a voice for lower taxes.

          • Dennis
            Posted November 20, 2019 at 2:56 pm | Permalink

            ‘Reply I am a voice for lower taxes.’

            So is my cat – same outcome though.

          • Hope
            Posted November 20, 2019 at 4:01 pm | Permalink

            Cameron and many others claimed the same. The record reflects a forty year high from your govt!

          • Lifelogic
            Posted November 20, 2019 at 5:41 pm | Permalink

            You are indeed a voice for lower taxes.

            But Cameron also claimed to be a “low tax at heart Conservative”, Hammond and Osborne claimed to be reducing taxes while they are putting them up endlessly while wasting public money hand of fist all over the place.

            The economy needs real tax cutting action not voices, lies and hot air! Cut taxes, cut red tape, cut government, cut renewable subsidies, get fracking, cut tax complexity, get fair competition in education, the media and health care, cull the loans for pointless and worthless degrees, relax planning, simplify employment laws and give people freedom of choice as to how they spend their own money.

            Stop stealing the money off them and pissing most of it down the drain. Taxes and red tape has gone up and up and up every since John ERM Major was an appalling Chancellor and even worse PM.

        • Martin in Cardiff
          Posted November 20, 2019 at 11:09 am | Permalink

          More particularly, makes this country a magnet for them to come.

          • agricola
            Posted November 20, 2019 at 4:21 pm | Permalink

            If a black economy was a magnet why do they not remain in Greece, Italy, or Spain where it is much more a feature than in the UK. There must be an even stronger magnetic pull in the UK to convince them that crossing the Channel in an inflatable yacht tender is worth the risk to their lives. Is it the language, the hand outs, or the Brits being a friendlier more hospitable lot than all those nice people in Europe. I have ruled out the weather.

          • Martin in Cardiff
            Posted November 21, 2019 at 9:21 am | Permalink

            Because there is a requirement for ID cards and other such proof of right of residence in most other countries, and there is not a pre-existing such economy amongst five million or so of their co-cultural fellows, perhaps?

            You cannot be both clandestine AND get benefits.

            Think about it.

        • Fred H
          Posted November 20, 2019 at 3:00 pm | Permalink

          marty – – -are you seriously suggesting other countries do not have ‘black market, cash only, avoid taxation’ social issues?

          You never cease to amaze me/us at your narrow field of vision.

          • Martin in Cardiff
            Posted November 21, 2019 at 9:24 am | Permalink

            See above.

            If these people were after benefits, then they would identify themselves.

            They do not.

            They melt into the crowd, and try to run away if discovered entering.

        • Lifelogic
          Posted November 20, 2019 at 5:50 pm | Permalink

          No what is needed is far lower taxes. If you get your car fixed at a garage you have to pay VAT 20% , NI (both employer and employee) 23% and income tax 20-45% – plus a share of the garage rates bill and the enforced pensions …. easily doubling the bill – then you have to pay tax and NI on the extra money you have to earn pay this double bill.

          All these taxes in the loop make DIY, bartering or cash in hand inevitable – perhaps the only way to get to work or cope at all for many people.

          • a-tracy
            Posted November 20, 2019 at 10:26 pm | Permalink

            And holiday pay;
            And holiday pay averaged overtime;
            And employers liability insurance;
            Building and equipment insurance;
            And a fund for potential ssp, 20%of amp/spl;
            PAYE software and upgrades;
            Software for electronic vat;
            Statutory audits (although not compulsory for all, the vast majority will have to pay these if credit is required or bank loans);
            Training costs and refresher training inc first aid, Fire Marshall;
            Business advice subscription especially for all the complicated and constantly updating legislation;
            Membership of trade bodies;
            Uniforms inc safety shoes any ppe;

            Decent employers are undervalued and constantly undermined and disrespected by the Corbynists and most politicians who think they’re just milk cows without votes.

        • libertarian
          Posted November 21, 2019 at 11:32 am | Permalink

          Martin

          As Ive told you before France and Greece and surprisingly Germany ALL have far worse “cash in hand” economies than the UK

          The UK tax gap is the lowest in Europe

          Stop making things up

  2. Anonymous
    Posted November 20, 2019 at 5:34 am | Permalink

    It’s advertised as to be used for funding the NHS. This is to out Corbyn Mr Corbyn.

    The media (BBC) led agenda is that A&E has never been under such pressure.

    They always mention old people but they never mention young drug addicts and drunks. Police officers are now ordered to call ambulances to A&E instead of police vans to custody.

    This policy may be right, it may be wrong – but where a relatively new policy has had a big impact on A&E it should be reported in the news, instead of blaming it all on one part of the community. I’ve only got to hear about it via friends in the police.

    • oldtimer
      Posted November 20, 2019 at 8:19 am | Permalink

      Interesting.

      It seems to me that the £6bn transfer of tax cut to NHS was entirely politically inspired. It sought to achieve two objectives through a single action.

      1 It was intended to demonstrate that the Conservatives are not in the pockets of big business as represented by the CBI – reinforced by the fact that Mr Johnson announced it to their face at the CBI annual conference.
      2 It was a highly public demonstration of transferring cash to the NHS and thus an earnest confirmation of intent.

      PS Last night’s encounter confirmed my view that the best way to set up such events is between one party leader at a time and the audience. Having two or more party leaders on stage at the same time results in a degeneration of the discussion into points scoring off each other rather than answering the questions posed by the audience.

      • Simeon
        Posted November 20, 2019 at 9:41 am | Permalink

        Your PS is an excellent point. Provided questions aren’t vetted to the satisfaction of the vested interests, I’d expect members of the general public to make a much better fist of holding politicians to account than either ‘journalists’ or the politicians themselves. These ‘debates’ are a charade – although it is possible to get a ‘sense’ of the man (or woman, in future debates) from these exercises.

      • NigelE
        Posted November 20, 2019 at 10:33 am | Permalink

        Agreed. I thought the interviews with the other four party leaders was far more informative in half the time given to Corbyn & Johnson.

      • Hope
        Posted November 20, 2019 at 11:30 am | Permalink

        JR, suggest you read Ruth Lea’s article. Con woman today. Unfortunately your govt has not exposed the rediculous spending of the Labour govt under Blaire/ Brown. Instead it wishes to currently out bid Marxist Labour.

        Cutting back on public,sector spending should not be seen as austerity but prudence and allowing people to keep their taxes to spend on what they want.

        However, you govts the blame because of its failure to get the message across and act on providing tax cuts.mAs Lea writes…”Such high spending levels, of course, have to be paid for. The tax/GDP ratio rose to 34.4 per cent in 2018-19, the highest ratio since the late 1960s and doubtless set to rise further. ”

        Another article shows quite clearly the sly underhand lies about your govts mass immigration policy. Labour wanted it to game election results and change the face of the UK Tories want it as cheap Labour for business and the big corporates to reduce wages.

        Moving left is never a good idea. That is why Trump w right last year to make the valid point that Globalisation is bad for the US.

        • Lifelogic
          Posted November 20, 2019 at 6:56 pm | Permalink

          When Osborne promised a £1 million IHT threshold each it provided a huge boost to the Conservative and made the daft Gordon Brown chicken out of his early election. About the only good thing he Osborne did.

          Needless to say it was never delivered by him or by Hammond or by Javid yet. They are not even promising to deliver it.

    • Lifelogic
      Posted November 20, 2019 at 8:40 am | Permalink

      This is the problem. The various arms of the state sector fighting among themselves to push things to the other sectors. GPs, the police, social services, casualty department all trying to avoid the ‘patient’ or dealing with the issue themselves.

      The police’s favourite excuse for doing nothing I find is to blame mental illness not our dept mate and do nothing until finally someone is very seriously injured or killed then they might actually do something but far too late.

      You need to charge a fee or deduct from benefits giving the drunks and drug addicts less to spend or drink or drugs the next day.

      • Lifelogic
        Posted November 20, 2019 at 8:46 am | Permalink

        I know from friends the appalling pressures some medical staff are put under at NHS Casualty with insufficient back up, support or time. No wonder so few, expensively trained and bright doctors will put up with it. Only about 50% of UK trained doctor do go on to work for the NHS. Best just to work in the city and not have the hassle, pressure and indeed the dangers of A&E.

        • Lifelogic
          Posted November 20, 2019 at 9:34 am | Permalink

          Also the doctors so often end up getting the blame, being sued or struck off when they are often working under dire pressures with insufficient time and without proper back up. Rather than the management. Often rather poorly paid and with perhaps £160K of student debt and with £9K PA of interest on it (to be paid back out of post tax income).

          Doctor’s suicide rates are about 250% higher among women and about 70% higher among men relative to the general population.

        • Hope
          Posted November 20, 2019 at 11:37 am | Permalink

          Mass immigration has caused unsustainable pressure on public services and housing. Both main parties still fail to address this and want to outbid each other to increase taxes and spend more. Their prolific spending does not come out of thin air or the magic money forest, it has to paid for. Johnson jokes but the joke is on he outrageous spending plans just like Labour.

          Stop mass immigration. Brown announced in November 2009 his new point based immigration system. How is this top immigration? We had historic record numbers under Mayhab despite promises to cut to tens of thousands. Johnson’s p,an does not even hide they do not want to cut numbers from the current historic high numbers!

          Browns point based policy was a deceit just like Patel’s gimmick no substance one today. She appeared good for five minutes and has now gone along with Johnson’s mass immigration policy.

      • Lifelogic
        Posted November 20, 2019 at 1:49 pm | Permalink

        Any tax cuts at all would be welcome but all we get is tax increase from the Conservatives and Labour since John Major was the dire Chancellor who took us into the EU up to disasters of Brown, Clarke, Darling, Osborne & Hammond. Now the highest as a % of GDP for 40 years dire public services too as we see with the leaked Maternity Care report.

        But to cut taxes one has to cut spending, spend efficiently and only on sensible things or borrow excessively which just defers taxation. No sign of prudence at all from the dire Conservatives. Labour/SNP/Libdim and the rest at least 100 times worse too.

        • Bob
          Posted November 20, 2019 at 3:56 pm | Permalink

          Here’s a few election winning ideas.
          Abolish:
          • Inheritance Tax
          • HS2
          • Stamp Duty
          • Overseas Aid (replace with disaster relief)
          • TV Licence
          • EU membership
          • Tuition Fees for STEM subjects
          • The House of Lords

          • Lifelogic
            Posted November 20, 2019 at 6:37 pm | Permalink

            Much to be said for that, though I would abolish soft loan for all the worthless degrees well over 50% clearly are. Let them pay for their own hobbies or go to night school.

            Anyone with less than say ABB at A level really should be learning something more practical and useful or resitting their A levels. This is probably about 75% of people currently going.

          • Fred H
            Posted November 20, 2019 at 8:36 pm | Permalink

            bob – — too late to stand for Parliament – you’d get a lot of votes.

          • Bob
            Posted November 20, 2019 at 10:15 pm | Permalink

            @Fred
            I copied it from UKIP’s website.

  3. Ian Wragg
    Posted November 20, 2019 at 5:40 am | Permalink

    But we are signing up to a Level playing field with the EU which will dictate taxation, social,environmental and a whole host more areas of policies.
    We can read and we really aren’t that dim.
    We also have a transition period of undetermined length when we are still in the EU without representaion.
    Boris has lied so many times no one believes a word he says.

    • BJC
      Posted November 20, 2019 at 8:42 am | Permalink

      Indeed, we will Remain in the suffocating embrace of th EU without any influence. Mr Johnson is selling snake oil, but sadly millions WILL believe in its curative “benefits”. He has no understanding as to how his EU treaty would restrict his ambitions and his vision, whilst admirable, is pure fantasy until his “best endeavours” are endlessly tested against this legally binding document. We already have the “oven-ready” WTO and its independent level playing field, which doesn’t come with all the whistles and bells attached to his dreadful treaty.

      • Simeon
        Posted November 20, 2019 at 9:46 am | Permalink

        The question is what will the electorate do when they find out they’ve been sold a pup, if indeed they buy what BJ is selling. Some will be saying ‘I told you so’. But how many will just shrug their shoulders before demanding more money for the NHS?

      • Martin in Cardiff
        Posted November 20, 2019 at 10:57 am | Permalink

        You shouldn’t have been misled into thinking that getting divorced would be like never having been married in the first place, as the Leave campaigns managed to do to those susceptible enough to such nonsense, then.

      • Posted November 20, 2019 at 5:37 pm | Permalink

        ”He has no understanding as to how his EU treaty would restrict his ambitions and his vision….”
        Oh yes – most certainly he has.

    • Pominoz
      Posted November 20, 2019 at 9:42 am | Permalink

      Ian Wragg, BJC,

      So it’s “Lets Get Brexit Done”. I wonder what this actually means?

      There have been hundreds of submissions here stating that Boris cannot be trusted to deliver the kind of Brexit so many of us want – a clean one! No transition period, no gigantic ongoing payments, no ECJ rule, supremacy of UK law, the ability, now, to enter trade deals around the world, control of our fish and so much more that properly defines a truly free, independent, sovereign nation.

      Anyone closely studying the narrative from Boris and that from EU officials can see that the timescale for each party’s version of a ‘proper Brexit’ is utterly at odds. It is either easily achievable within months, or it could take much longer than three years (perish the thought!). So who is telling ‘porkies’?

      In order to maximise votes for his party, Boris needs to keep on board not only those who want a ‘no deal’ but also those who abhor the thought of such an exit. I am still clinging to the hope (no doubt many will say foolishly) that the undoubtedly clever Boris is deliberately avoiding promises which might satisfy many who visit Sir John’s site, but could possibly drop countless votes. Hopefully, once he has the necessary working majority Boris will trigger his ‘master plan’, ‘bin’ the WA and PD and go for a WTO Brexit with a simple FTA. This will put us back in the driving seat in future negotiations with the EU – a position which should never have been surrendered by May and her unpatriotic coterie.

      • Simeon
        Posted November 20, 2019 at 7:36 pm | Permalink

        It is entirely your prerogative to cling to this hope. Just be aware that it’s the hope that kills you…

        PS I for one doubt BJ’s cleverness, though of course I only have his words, ideas and policy proposals to judge him on. Then he again, he was up at Oxford, so perhaps I should give him the benefit of the doubt… 😉

        • steve
          Posted November 20, 2019 at 11:33 pm | Permalink

          Simeon

          “I for one doubt BJ’s cleverness”

          He only ‘thinks’ he’s being clever by keeping us in the dark about what the un-polishable item really means for this country.

          He’s in for hell of a shock.

        • Pominoz
          Posted November 21, 2019 at 2:31 am | Permalink

          Simeon,

          I thank you for your concern.

          I have gone through life with hope – but not expectation. It is this philosophy which, whatever the outcome, leaves me without frustration and able to hope again another day.

          • Simeon
            Posted November 21, 2019 at 8:23 am | Permalink

            Different strokes for different folks. In these dark times, if you have a winning approach, by all means hold on to it. Of course, you are somewhat protected from this being the other side of tte world – though I don’t envy the stick you must inevitably get!

        • Pominoz
          Posted November 21, 2019 at 7:46 pm | Permalink

          Simeon,

          Get no stick whatsoever. Oz is so multicultural with Britain and the Poms very well loved and also very well represented. The Aussies (and me and my English neighbours) are eager to see a fully independent UK so that they can agree a first-rate FTA and then Brits can enjoy top quality, tariff-free, wine, beef and a whole lot more.

      • steve
        Posted November 20, 2019 at 11:28 pm | Permalink

        Pominoz

        “…..but also those who abhor the thought of such an [no deal] exit”

        Nah, we don’t want them, they’re the ones who caused much of this mess.

        You think we would be willing to group hug these ‘people’ ? ain’t ever gonna happen.

  4. Mark B
    Posted November 20, 2019 at 6:05 am | Permalink

    Good morning.

    Sorry, off topic.

    I would like to ask our kind host again if he has been in touch with his old friend Ann Widdecombe recently ?

    So the Treasury think the government will lose £6bn a year but, is not so unhappy to lose £1bn a month to the EU. On that score I think we need a new Treasury.

    If we are indeed Leaving the EU, then these tax cuts would be self funding ? The money business would save does not just disappear, it goes on wages, investment and other spending. All into the ‘productive’ economy and not to the government pocket for it to waste.

    I argue that what the Treasury is afraid of, is loss of power. As more money is kept by we the little people to spend as we please, it loses power and influence over other government departments and government itself. Government with less money to spend on worthless vanity projects which always spiral out of control, is not what the corporates want. They need those big White Elephants, even if we do not.

    I think cutting Corporation Tax by say 1% would be a good start. If the government were to get more revenue as a result it could cut it by another 1% or vice-versa.

    • Alan Jutson
      Posted November 20, 2019 at 8:23 am | Permalink

      Mark B

      Bit by bit is far too sensible a comment for it to gain any traction.

      We now have Parties trying to outbid each other on the planting of trees for goodness sake.

      If you promise to plant 30,000,000, we will plant 60,000,000, type of nonsense.

      The fact is, the so called Boris deal is awful, and will keep us under the control of the EU, and at the same time paying for the privilege, with absolutely no say whatsoever.

      • sm
        Posted November 20, 2019 at 10:11 am | Permalink

        “This whole idea of planting more trees across the world gives me goose bumps. It has a northern hemisphere bias. These people do not know what they are saying, it does not make sense.” Joao Vidal, University of Free State mountain vegetation and climate researcher. He says that mountain grasslands play a crucial role in protecting scarce water resources, as extensive research has shown a statistically significant reduction in stream flows in areas where tree and other woody plants encroach into former grasslands.

        [quoted in S African Sunday Times 17 November 2019]

  5. Shirley
    Posted November 20, 2019 at 6:29 am | Permalink

    I think the EU are hellbent on controlling tax rates and this is just a temporary situation. If ever the UK manages to actually Leave the EU and stops funding the EU, then I can foresee taxes rising in the EU, and new taxes being created to fund the ‘purchase’ of additional countries. Many European countries already pay the highest taxes in the world.

    Better to have £10 in the hand than raise £20 and give it to the EU who will use it to ‘buy’ more loyalty & power for themselves in direct conflict to the people who paid it.

  6. Sir Joe Soap
    Posted November 20, 2019 at 6:29 am | Permalink

    We’re opening up for business with the world. We should be attracting companies to set up in the GB, not send them to Ireland or elsewhere because they get stung for tax, and probably still for business rates.

    Until trade deals are done, we are at a disadvantage. A CT holiday of say 5 years for new companies setting up here would not, by definition, reduce CT returns. The Irish offer us 12.5% CT but 6.25% for businesses setting up to exploit new technology. NI, I believe, will stick at 12.5%, giving a 30% advantage over GB.

    Give me one good reason for setting up in the GB next year instead of NI or Ireland.

    • acorn
      Posted November 20, 2019 at 8:50 am | Permalink

      When did Northern Ireland’s CT rate drop to 12.5%?

      A 1% change in Corporation tax (CT) is worth £2 billion currently. it is planned to be £3 billion by 2022/23. On average half of total, CT liability will be offset by a bag full of deductions and reliefs, many being removed by HMRC; down to £55 billion. CT is actually a self-assessment tax, HMRC works out the liability after the corporates have paid it.

      • Edward2
        Posted November 20, 2019 at 9:21 pm | Permalink

        yet as rates dropped revenues rose.

        • acorn
          Posted November 21, 2019 at 7:44 am | Permalink

          The Northern Ireland CT rate remains at 19%. The legislation has not been enacted yet to reduce it. Because there is no NI legislature operating.

  7. Narrow Shoulders
    Posted November 20, 2019 at 6:46 am | Permalink

    I would like to know why this tax cut was authorised in the first place.

    A tax cut that reduces the tax take at this time of the economic and budgetary cycle? If there was an understanding that it would bring in business or increase taxes OK but £6 bn cost. Whose idea was that.

    Returning child benefit to those who are not really rich would only cost £1 bn and would, if it exists, be an example of trickle down economics as the parents receiving it would be spending it on their families.

    • Matt Ryan
      Posted November 20, 2019 at 4:45 pm | Permalink

      Are you aware that the corporation tax is incident on consumers through higher prices so cutting this will trickle down as well.

      There is no such thing as a tax on a business – it’s either the customers or employees who pay in one form or another.

      • Narrow Shoulders
        Posted November 20, 2019 at 6:25 pm | Permalink

        I suspect it will not get to customers. Shareholder and other bonus recipients maybe.

        Trickle down is a myth

  8. sm
    Posted November 20, 2019 at 6:51 am | Permalink

    John – I’m sorry to keep flogging (along with many others) what sadly appears to be a dead horse, but the best way of improving tax revenues and lessening hostility to tax impositions would be to simplify the whole tax system, whether for commercial, institutional or personal matters.

    As far as I can tell, the Office of Tax Simplification has produced some reports. If any had been adopted, I would imagine recent Chancellors might just have had the nous to broadcast this from the rooftops. Have I missed something?

    • GilesB
      Posted November 20, 2019 at 9:04 am | Permalink

      I agree.

      For many small businesses the complexity of the tax system is a much greater burden than the cost of the tax paid. The days and sleepless nights wasted over understanding each minute change in the tax code, the effort to change processes to ensure compliance for only a few transactions each month, the cost of external professional advice is a massive burden. Simplification is essential.

      For large corporations complexity is less of a burden as they have full time staff to track these matters and implementation costs can be spread over millions of transactions. For them the problem is the distortions and misallocations caused by unintended consequences of tax allowances and reliefs. There should be no incentive from the tax system to change where and how firms compete for resources including recruitment, operations, or sales. Leave the headline rate alone and reduce the number of reliefs and allowances. Even those designed to encourage investment lead to distortions as they lead to scrappage and misallocation if other resources. The tax take will go up in the short-term as firms no longer gain the tax shield, go up further in the medium term as firms reallocate resources to patterns not driven by tax considerations, and up again in the long-term as firms increase investment in the UK as they appreciate that the Government keeps out of their way as much as possible rather than micromanaging, through tax nudges, how they plan, design and operate their business,

      • Simeon
        Posted November 20, 2019 at 7:39 pm | Permalink

        For large corporations complexity is in fact a competitive advantage. It is also a boon to accountants and lawyers. It is, therefore, a very Tory thing.

  9. Dominic
    Posted November 20, 2019 at 6:51 am | Permalink

    You’ll have to do better than that to try and justify a policy action that is in effect a capitulation to both the left and the EU though to even an attempt a justification is disheartening to say the least

    Tax policy’s primary aim should be to encourage economic and investment health not as Government raising revenue exercise. You appear to have forgotten this

    It does appear Johnson’s aim is to neutralise attacks from the left by refusing to follow a tax cutting agenda and so he’s chosen to fight this GE according to Marxist Labour’s agenda by opting to bribe people using their own money. Pure pork barrel politics, unprincipled and utterly disingenuous

    I watched that farce on TV last night. Johnson up against a man whose history is tarnished and filled with the most appalling associations, views and vileness leading a party that is rank and packed with extremists and he never got knock-out

    I’m tired of the Tories and their lack of principle and their rejection of the truth. They can expose Labour tomorrow. You chosen not too. You’ve legitimised an extremist party led by and packed with extremists. By doing this you have turned them into a party people will vote for because the electorate themselves don’t know the truth of who and what they are

    If do achieve power it will be the Tories who are directly responsible. Try putting the interests of the nation above the interests of your party

    • Posted November 20, 2019 at 8:02 am | Permalink

      I’ll vote for you. Spot on. The Tories are going for the ‘least worst’ option. No courage, vision, honesty. If they were up against a Tony Blair type character they would be nowhere.

      The only hope is that winning the election enables them to show their true colours. With most of the potential cabinet being the same ‘weak’ people that failed to challenge Theresa May, my expectations are close to zero.

    • APL
      Posted November 20, 2019 at 9:33 am | Permalink

      Domonic: “I’m tired of the Tories and their lack of principle and their rejection of the truth. They can expose Labour tomorrow. You chosen not too. You’ve legitimised an extremist party led by and packed with extremists. By doing this you have turned them into a party people will vote for because the electorate themselves don’t know the truth of who and what they are.”

      If you are laboring under the misapprehension that the Tory party is the party that represents the right and opposes the left of the Political spectrum, think again.

      The Tory party is simply the name of the mob that wants power as much as the Labour mob.

      No principles, no integrity, an empty void. The modern Tory party.

      • APL
        Posted November 20, 2019 at 9:35 am | Permalink

        “No principles, no integrity, an empty void. The modern Tory party.”

        Where do Tories that defect scuttle off to? The Lib Dems. I rest my case.

        • Martin in Cardiff
          Posted November 20, 2019 at 4:41 pm | Permalink

          Farage was a Tory, then there’s Mark Reckless and Douglas Carswell.

          • steve
            Posted November 20, 2019 at 10:44 pm | Permalink

            MiC

            “Farage was a Tory”

            But now he’s a long distance runner.

    • Simeon
      Posted November 20, 2019 at 9:51 am | Permalink

      I think the Tories are unable to expose Labour because to do so would be to expose themselves.

      • steve
        Posted November 20, 2019 at 10:47 pm | Permalink

        Yep, they’re all in it together. The whole thing is a charade and we’re being had over.

    • A.Sedgwick
      Posted November 20, 2019 at 10:06 am | Permalink

      Quite

      Corporation tax level is highly subjective to numerous factors, effectively voluntary for some. Luxembourg and Eire seem to have licence independent of EU rules. BJ is not a clear thinker.

      The “debate” last night turned out to be the expected farce – useless format, useless presenter. Why the Conservatives agreed to it is another example of their completely losing the plot. Leave the next one to Jo and that nice man from Islington.

    • The Prangwizard
      Posted November 20, 2019 at 11:47 am | Permalink

      My reaction to our host’s above piece today was to silently groan, and to think ‘I don’t believe you’. The Tory party and our host seem more and more to be pink versions of the hard Red Labour party.

      You would expect party first during an election period but it all seems weak and not persuasive. Perhaps Sir John’s heart is not in it any more.

  10. Posted November 20, 2019 at 7:13 am | Permalink

    Mr Corbyn last night appealed shamelessly to people’s envy of the very rich and pretended to support the poor in a very unfair society. This is shameless.
    He feels it is all right to skin the rich and give the money to the poor like Robin Hood.
    Compared with the people who live round here, the man is seriously rich himself.

    What I want to see is the unleashing of the British trading genius and there need to be incentives to do that.
    Otherwise, like my family, the brightest and best will move abroad where they can enjoy the freedom to be rich and successful.

    • Lifelogic
      Posted November 20, 2019 at 10:29 am | Permalink

      Indeed Corbyn will never deliver for the poor he will just destroy the economy that pays for everything and chase the rich overseas. It is just the usual magic money tree, politics of envy and fake Father Christmas, evil politics of envy agenda. Yet the BBC discuss it with Mc Donnall as if it were remotely realistic and a sensible plan.

  11. Dave Andrews
    Posted November 20, 2019 at 7:19 am | Permalink

    Global multi-nationals are quite relaxed about Corporation Tax. They can arrange their affairs so they don’t pay much if any. They enjoy this privilege with the approval of the UK government that wants foreign investment. Unfair competition is a price the government is happy for UK companies to pay.

    • Sir Joe Soap
      Posted November 20, 2019 at 8:52 am | Permalink

      Yet a new enterprise wanting to build working capital without borrowing ends up paying CT on the retained profit which is all in debtors less creditors, plant and inventory. Give a 5 year holiday to new enterprises with below £250k net profits to enable startups to prosper.

  12. Richard1
    Posted November 20, 2019 at 7:25 am | Permalink

    Well so far the cut from 28% to 19% has led to a near doubling of receipts, so the static treasury model is probably wrong (again).

    The language accompanying this is also disappointing. If Boris thinks not cutting from 19% to 17% ‘saves’ £6bn, why is Corbyn not correct that whacking it back up to 28% wouldn’t ‘save’ even more?

    The debate was disappointing also, with Boris’s only point being ‘get brexit done’.

    Here are a few points for mr Cummings to note for prep for the next debate:-
    – the Conservatives can spend more on the NHS because the deficit has come down from 10% of GDP where Labour left it to 1%
    – you can have a trade deal with both the EU and the US (Corbyn said you can’t) – Canada has both
    – it won’t take 7 years, as Corbyn said, to agree an FTA with the US, it took Australia 14 months.

    And quite a bit more.

    • a-tracy
      Posted November 20, 2019 at 10:42 am | Permalink

      I agree with you Richard1.

      Corporation Tax rates in Germany and France were 15%. Then there are payroll credits in France as the CT rate went up which reduced the CT bill by 40%.

      If Southern Ireland doesn’t increase their rate of corporation tax then Northern Ireland should be allowed to match it.

  13. Posted November 20, 2019 at 7:30 am | Permalink

    The Laffer curve says otherwise and Treasury forecasts have been notoriously wrong. Why should we believe them this time? Maybe the direct tax they pay may be reduced but what about the tax their employees would pay, their spending lifts VAT, gives employment to more people who in turn pay tax and so it goes on?

    Indeed post EU I cannot see anything other than large corporations wanting to domicile here to take advantage of (hopefully) less red tape and lower regulation, although we are hearing nothing on the economy from the Tories, merely denouncing Labour. Reducing their tax would be an added incentive and it goes to show how far you have moved from your roots.

    If it is not the EU my guess is the Tory hierarchy feel exposed to Labour on the amount of tax ‘fat’ corporations pay or don’t and the NHS and this announcement was to ‘dampen their powder’.

    So get elected and then plan for cuts.

  14. Stred
    Posted November 20, 2019 at 7:39 am | Permalink

    The difference between a few % on corporation tax is not going to make tax take change much. What will make a difference is the future energy costs and the rate of total taxation, which is very high.
    Having managed to stay awake during the spat between our future leaders, it is still not clear when Boris intends to sign the withdrawal treaty. When he says that we will leave on, 31.1.20 he will have to sign then in order to start negotiations on trade. Why we have to pay billions for them to sell ud much more is another question. But, having signed, we will not be able to diverge from energy policy and will have to respect the Paris agreement and directives on renewable energy, which again means buying a vast amount of wind generating kit from German and Danish manufacturers. We are already paying £20bn for the European Pressurised Reactor when the French put their cost at half of this and the Chinese have built two for less than this. It is likely that the UK will be paying a very high cost for energy and that manufacturers will not be attracted and those already here will have to leave.
    At the moment almost all MPs are in agreement that this disaster is the only way to go and the only argument is how quickly do we bankrupt the country.

  15. alastair harris
    Posted November 20, 2019 at 7:42 am | Permalink

    Except corporations don’t pay tax. Remove corporate taxes and increase the return to shareholders AND employees, and by virtue of income taxes, Governments. The problem with our tax system being as complex as it is is that no one really understands the dynamics of changes in individual rates. That is by no means the only problem!

    • Matt Ryan
      Posted November 20, 2019 at 4:47 pm | Permalink

      +1

  16. agricola
    Posted November 20, 2019 at 8:03 am | Permalink

    Only when we have left the EU cleanly, and signs are we will not, does having our own tax policy have any relevance. While attached in any way we are under control. Nothing said last night suggests it will happen. “Get Brexit Done” is in conflict with an apparent 635 Tory candidates who have signed up to WA2 in the words of Boris. While the umbelical of WA2 and HS2 continue, talk of tax cuts is an irrelvance, desirable though they might be.

    Last night on ITV was dreadful. We need the return of Robin Day to forensically disect the main contenders one at a time in isolation. Perhaps it was judged that after such a horrible performance by the main two the other four would create scant interest. True in my case.

    • Brian Tomkinson
      Posted November 20, 2019 at 9:09 am | Permalink

      I agree about the “leaders’ debates”. They are not debates, there is insufficient time to respond before being told your time is up annd they should be replaced by a one hour forensic interview of each party leader by the only political commentator worthy of the title, Andrew Neil. He is better informed than the politicians which I suppose is why they won’t agree to it.

      • agricola
        Posted November 20, 2019 at 4:08 pm | Permalink

        Agree with you on Andrew Neil. Lets hope the BBC learn something from last nights road crash of a debate. The only revealing element was audience reaction.

  17. Christine
    Posted November 20, 2019 at 8:07 am | Permalink

    The EU is going to introduce tax harmonisation across member states. So Ireland will have to raise their rates. As BJ is signing us up to a level playing field he would need to raise the UK rate in line with this. Better to not reduce it in the first place rather than face the humiliation of having to raise it again later as it will show we are just a puppet of the EU.

  18. James Freeman
    Posted November 20, 2019 at 8:34 am | Permalink

    In this case you might be right. If we are out of the EU single market’s free movement of capital rules, we can pass laws to prevent corporation tax leaking to Ireland and Luxembourg. This will move up the max tax take point on the UK Laffer curve for this tax. 19% is a fair rate and is probably this point.

  19. formula57
    Posted November 20, 2019 at 8:38 am | Permalink

    I do not know the answer to your question but I do know you have made a persuasive case for how the economy can be managed and in particular fiscal policy that is much more attractive and convincing than what is on offer apparently from this Government.

    Brexit will not be the excuse for unleashing an Erhard-type economic miracle, will it, alas!

  20. hefner
    Posted November 20, 2019 at 8:45 am | Permalink

    Will Facts4eu check FactcheckUK?

    • Lifelogic
      Posted November 20, 2019 at 9:11 am | Permalink

      The hugely biased BBC’s “reality check” is perhaps some of the most biased propaganda around from an organisation that has supposedly has a duty to be impartial.

      Not much impartiality from the endless Marr, Nick Robinson and Maitlis types. Lefty, climate alarmist, pro EU, magic money tree, big government, art graduate drivel from them endlessly nearly every day.

      • Fred H
        Posted November 20, 2019 at 2:54 pm | Permalink

        agreed – they are so dreary.

      • Matt Ryan
        Posted November 20, 2019 at 4:50 pm | Permalink

        Indeed, the BBC bias shows by only ever fact checking things it doesn’t agree with. It lies by omission as it never checks things it agrees with (like the likely impact of climate change) and even if it did, it couldn’t be trusted to be honest.

    • eeyore
      Posted November 20, 2019 at 11:02 am | Permalink

      If they do, they should also check Labour’s so-called fact-checker The Insider. Both parties and their leaders have credibility issues; silly pranks like this will just exasperate the public.

      In answer to JR’s question in his last paragraph, there should be a presumption that Tories want all taxes as low as possible and the state as small as possible. Let them make cuts to test the consequences, explaining what they’re doing and why.

      If the results are disappointing they can then easily reverse them.

  21. Dominic
    Posted November 20, 2019 at 8:54 am | Permalink

    It is the British taxpayer (the private sector) who always gets a proper kicking and do you know why? In political terms we’re an easy target. We can’t fight back. We have no political power. We have no leverage. We have no influence. The message is simple. Pay your tax, keep quiet, embrace silence and dance to our tune

    To see Tory MPs sell out to the left, pander to the public sector vested interest, turn a blind eye to their extremism and accept their new authoritarian orthodoxy is utterly OFFENSIVE to all Tory voters

    We need a moral political party that breaks the status quo

    • Chris
      Posted November 20, 2019 at 9:38 pm | Permalink

      Agreed, Dominic. The Boris government was/is not true Conservative, and does not give any signs that it will be.

  22. Dan
    Posted November 20, 2019 at 8:59 am | Permalink

    I’m undecided about what level of corporation tax would be best for the UK. The current level is effective and so does not necessarily need lowering but perhaps should be applied in a layered format so there is perhaps a holiday for new firms, say 1-2 years. A minimum threshold level of £50k below which no firm pays CT, 10% at £50-£100K and 19% above that.
    On the other hand, our tax code is incredibly large, unwieldy and complex at 21000 pages and growing. The most effective tax code in the world is that of Hong Kong, it is 276 pages. We should be aiming at completely reforming our tax code to much lower levels, perhaps 500-100 pages. That would save an enormous amount in administration fees alone, it would prevent tax evasion and tax avoidance and would probably end up increasing the tax take overall.

  23. Lifelogic
    Posted November 20, 2019 at 9:06 am | Permalink

    In 2018, government expenditure in Singapore was 17.48 % GDP and GDP per cap PPP there is more than double that of the UK.

    We just need far less, largely parasitic, government getting in the way. If anything the UK should be doing rather better than Singapore not far, far worse. The problem is that the “Conservatives” have been a big government tax borrow and piss down the drain, greencrap pushing socialist party with the highest taxes for 40 years. Labour, Libdims, SNP, Plaid and the Greens are far worse. Then we have the BBC propaganda outfit and the dire EU to escape.

  24. Kevin
    Posted November 20, 2019 at 9:21 am | Permalink

    I do not see the parallel between the UK’s future relationship with the EU, and the tax policy of one EU member state (Ireland) relative to another member state. According to a Brexit Party video, the UK’s ability to secure a trade deal with the EU would be subject, under Boris’ Deal, to clause 77 of the Political Declaration, which reads: “[T]he future relationship must…[encompass] robust commitments to ensure a level playing field…. These commitments should prevent distortions of trade and unfair competitive advantages. To that end the parties should uphold the common high standards applicable in the Union and the United Kingdom at the end of the transition period in the areas of…relevant tax matters. The Parties should in particular…[prevent] undue distortion of trade and competition; commit to…the curbing of harmful tax practices”. I have highlighted the part in bold because during the transition period it is my understanding that the EU would have exclusive legislative authority over those “common high standards”? Can the Conservative Party comment on this, and on the necessity, in any case, for us to be a party to this clause?

    Reply When the legislation for the “Implementation period” is considered the issue of tax powers during transition will need careful examination. IT is also crucial that no binding promises are made on future tax practices to secure an FTA.

    • Hope
      Posted November 20, 2019 at 8:20 pm | Permalink

      JR, I think you are wrong. The PD is legally binding for the sentiments to be brought alive in any future trade deal. If not the UK could be deemed to not be acting with best endeavours. ECJ would arbitrate and settle any dispute! Why not ask Martin Howe QC to highlight his previous view on the legal consequences of the servitude plan and PD?

      The PD is what it says, I don’t understand why you think it could mean something else not yet discussed let alone written.

      • Chris
        Posted November 20, 2019 at 9:36 pm | Permalink

        I believe, Hope, that many members of the ERG are similarly misled by the PM’s deal. Steve Baker and others were far too quick, in my view, to accept the title (rather misleading) of Martin Howe’s article on the Boris deal and think that is this QC wrote about it being “tolerable” then it was acceptable. If they had taken the trouble to read the detail of Howe’s article, and consulted other legal opinion e.g. Benjamin Wrench’s legal Briefing Note (barrister, Brussels), and the Bruges Group and Facts4eu websites, they would have seen why and how the Boris deal was not Brexit in any shape or form.

        Furthermore, Howe was writing at a time when Boris was under pressure from Remainers, but if he wins an election he will not have those constrictions (unless he appoints Remainers to his Cabinet) and can go for the real deal (he should have gone for the real deal in the first place).

    • agricola
      Posted November 20, 2019 at 9:57 pm | Permalink

      It confirms that Boris’s WA2 is not going to be a walk in the park. Further analysis suggests to me that there will be an internal battle in the Conservative party between those who out of loyalty have signed up to WA2 and those who have taken the trouble to study it and realise it falls woefully short of a clean exit from the EU. This loyalty clause in candidates candidacy could put us right back where we were before the election was called, even with a healthy majority. Or is Boris more Machiaveli than I credit him to be, and intends a clean departure on 31st January after all.

  25. glen cullen
    Posted November 20, 2019 at 9:22 am | Permalink

    Throw the current tax book away its ridicules in its size, complexity and number of loop holes…. you need to shred the whole thing and start again

  26. Fred H
    Posted November 20, 2019 at 9:41 am | Permalink

    Here we go again. Boris is the election war tactician this time. Move a few bob to this cause that will get votes, suspend this step that will prevent Corbyn claiming it, encourage this eco-friendly move that will dampen rallying calls, tighten military ties that will appeal to the toughies. Repeat ad nauseam to get Brexit done – the foolish will believe it. Maintain the smiles, bat away criticism, sing the ‘everybody together’ tune…….except that ‘we don’t believe you’. Politicians, eh!

  27. agricola
    Posted November 20, 2019 at 9:59 am | Permalink

    Off Topic.

    A large part of the attraction of your diary is the interaction and exchange of ideas between contributors. This falls flat when moderation is slow and fragmented. Going from 28 submissions to 132 with a day long gap tends to destroy this aspect of the diary. I know you have a lot going on at the moment and little less on other days, but can I suggest you moderate in time order rather than in ease of moderation order.

    • Fred H
      Posted November 20, 2019 at 2:52 pm | Permalink

      agricola – – I bet Sir John is glad you aren’t going to be the Party’s PM- – give the guy a break, he has a lot on his plate.

      • agricola
        Posted November 20, 2019 at 9:22 pm | Permalink

        Well you have to “Put a bit of stick about from time to time”. He is a big boy and more than capable of looking after himself. It was only a suggestion, not an order.

    • Alan Joyce
      Posted November 20, 2019 at 5:48 pm | Permalink

      Dear Mr. Redwood,

      @agricola

      Your suggestion is sensible if, perhaps, a tad unfair on Mr. Redwood which I am sure is not your intention.

  28. Newmania
    Posted November 20, 2019 at 10:12 am | Permalink

    Taxes on Companies are only taxes on people, customers, wage earners or shareholders . A Company has no other existence .They are your least favourite tax cut because they are the least politically expedient
    With the National debt projected to escalate to 95% of GDP there is no room for any tax cuts at all .If our choice was not between two fantasists the subject of the day would be the difficult choices the country has to make thanks to Brexit worsening our ongoing debt crisis.
    What is required is what we used to think of as the Conservative Party..anyone remember it , business friendly moderate , fiscally prudent competent ?

    • Matt Ryan
      Posted November 20, 2019 at 4:51 pm | Permalink

      +1

  29. a-tracy
    Posted November 20, 2019 at 10:22 am | Permalink

    Boris needs to put you in the treasury to reassure us. What Hammond gave with one hand on corporation he took back from the majority of SME’s with his dividend tax grab.

  30. bigneil(newercomp)
    Posted November 20, 2019 at 10:22 am | Permalink

    Cutting? – for who? Certainly not for the likes of me who’ll see my council tax go up by more than any pension rise – while also seeing council services cut. We also have to pay for the 39 Iranians who arrived by dinghy last weekend – and no doubt, very soon, their entire families.

    • Cheshire Girl
      Posted November 21, 2019 at 6:31 am | Permalink

      Indeed. And Labour talk glibly about their plans for ‘family reunification’. It makes me shudder. In my opinion, this is ‘immigration by the back door’.

      Dont they ever get the message, that we are FULL.

  31. Roy Grainger
    Posted November 20, 2019 at 10:35 am | Permalink

    A cut in corporation tax would no doubt come with a balancing increase in the dividend tax I pay on my pension investment income so I am opposed. Every man for himself.

  32. Alan Joyce
    Posted November 20, 2019 at 10:44 am | Permalink

    Dear Mr. Redwood,

    Wikipedia shows that UK corporation tax rates and revenues since 2010 were as follows:

    2010 28% £43.0bn
    2011 26% £43.1bn
    2012 24% £40.5bn
    2013 23% £40.3bn
    2014 21% £43.0bn
    2015 20% £44.4bn
    2016 20% £49.5bn
    2017 19% £54.6bn
    2018 19% ?
    2019 19% ?
    2020 17% (cancelled reduction)

    The figures for 2018 and 2019 are not available but it would seem that reductions in corporation tax have led to increases in government revenue, particularly since 2014. Would the planned, but scrapped, cut to 17% increase tax revenues? Who knows, except the Treasury mandarins?

    The Conservative party’s policy, if elected, is to negotiate a (Canada-style?) free trade agreement before the end of 2020. The EU will try its hardest to persuade the UK to commit to ‘harmonise’ workers rights, environmental regulations and tax rates or it will not agree a FTA. Negotiations will go to the wire once again amid talk of cliff edges and crash outs from the Opposition. The EU is wary of the UK as an offshore competitor.

    Mr. Johnson should respond that unless the EU agrees the FTA by December 2020 then the UK will cut corporation tax rates and boost measures to increase the UK’s competitiveness and seek to persuade companies to relocate to the UK. Let us hope that the UK does not allow Mr. Barnier to be in charge of the timetabling for the talks.

    I remain unconvinced that the scrappage of this tax cut is not related to our forthcoming efforts to harmonise our tax policies with the European Union so that a FTA can be agreed.

    • acorn
      Posted November 20, 2019 at 4:57 pm | Permalink

      I smell a reference to the non-existant Laffer Curve coming again. Corporation Tax (CT) is increasing because there are more corporations becoming liable for it. But principally, the Treasury has been reducing the number of reliefs that can be claimed from 57% to currently 53%. Plus, by 2022/23 discounts will be considerably less. I reckon that CT liability in 2019/20 will be at least 10 to 15% greater than 2016/17.

      • Edward2
        Posted November 20, 2019 at 9:24 pm | Permalink

        You are really struggling to avoid the obvious increases in revenues as rates lowered.

        • acorn
          Posted November 21, 2019 at 7:29 am | Permalink

          Between 2010 and 2013 Corporation Tax rate was reduced by a total of five per cent. The CT receipts dropped each of those years.

          • Edward2
            Posted November 21, 2019 at 12:21 pm | Permalink

            Not low enough.
            When rates were lowered further revenues increased.
            There is an optimum figure for tax rates but the left hate the idea because it exposes the real reason of their desire to have high percentage headline rates as purely envy and spite not to actually increase revenues.

      • libertarian
        Posted November 21, 2019 at 11:15 am | Permalink

        acorn

        Come back to us when you actually understand how corporate taxes work

        ps as your starter for ten EVERY COMPANY is liable for corporation tax IF they make a profit .

        “Treasury has been reducing the number of reliefs that can be claimed from 57% to currently 53%” What? this is a meaningless statement, what are you trying to say?

        • acorn
          Posted November 21, 2019 at 12:37 pm | Permalink

          “Across all companies, set-offs including capital allowances and group relief reduce companies’
          CT liability by 53%. This is down from 57% in 2016-17, indicating that companies were not able
          to offset as much of their gross trading profits and other income as in the previous financial
          year. These set-offs are affected by recent loss and interest restriction rules, which have begun
          increasing liabilities from 2017-18”. (HMRC CT Statistics)

          I am surprised you, as an international business man, are not aware of these recent changes to CT!!!

          • Edward2
            Posted November 21, 2019 at 10:46 pm | Permalink

            Or they just made less profits.

  33. Ex-Tory
    Posted November 20, 2019 at 10:50 am | Permalink

    Abolish corporation tax and recoup the lost revenue by increasing tax on dividends.

  34. Arnie from Newington
    Posted November 20, 2019 at 11:13 am | Permalink

    The most unfair tax at present is section 24 tax. This tax is driving landlords on modest incomes into the higher tax bracket.

    It is the only tax I am aware of that ignores UK GAAP in calculating profit to artificially inflate income.

    • acorn
      Posted November 20, 2019 at 5:34 pm | Permalink

      Section 24 limits BtL landlords to basic rate tax relief. Arnie, wake-up and smell the coffee. No UK political party or the EU wants “buy-to-let” landlords. None of them wants one household in a street paying rent to their next-door landlord. It is a recipe for insurrection.

      I envisage that in the near future, BtL landlords will be forced via the tax system, it has already started; to sell out to a Housing Association or a Local Council Housing department.

      • Stred
        Posted November 20, 2019 at 7:37 pm | Permalink

        And the Treasury can’t wait to get it’s hands on the government planned ridiculous value increase via CGT.

      • Arnie from Newington
        Posted November 22, 2019 at 3:38 pm | Permalink

        It’s the way that the tax is calculated that is wrong and is driving landlords into the higher rate tax bracket.

        If it didn’t affect basic rate landlords then it would be a lot fairer.

  35. William Long
    Posted November 20, 2019 at 11:23 am | Permalink

    My own view is that any tax rate around 20% is roughly right so I see no need to cut Corporation tax further. The priority should be to address the ridiculous levels of personal taxation on income and inheritance, and in particular the marginal rates that apply to those above the threshold for losing the personal allowance. It is not just doctors who suffer from this. Above all this, though custs should be part of it is the need for radical simplification of the Tax system – a far greater priority than Corporation Tax.

  36. Willoicc
    Posted November 20, 2019 at 11:58 am | Permalink

    All direct company taxes should be reduced and VAT increased to move taxation away from production onto consumption.

    We import far too much from abroad and our economy is shrinking daily.

    We should abolish all free trade and impose tariffs and quotas to encourage people to support British businesses.

    We imported over 700,000 Mercedes (alone) cars in one year. That is thousands of jobs in manufacturing and support services which we are shipping to Germany. Plus all the BMWs, Audis, VWs and all the other countries we export OUR jobs to.

    The nation that invented trains, we also import new trains which should be made here. We are losing expertise in every area.

    We have HUGE fiscal and balance of trade deficits which are correlated and get BIGGER and BIGGER every day. IT IS IRRESPONSIBLE GOVERNMENT MADNESS.

    • Fred H
      Posted November 20, 2019 at 2:49 pm | Permalink

      We imported over 700,000 Mercedes (alone) cars in one year.’
      NONSENSE – not even 200,000.

      • Willoicc
        Posted November 20, 2019 at 10:53 pm | Permalink

        I apologise for that figure. I really do not know where I got that from.

        However, my main point remains true, we import far, far too many foreign goods into the UK, especially overpriced German cars.

        • Fred H
          Posted November 21, 2019 at 8:21 am | Permalink

          totally agree with the point – if we abandoned the licence plate YEAR message ‘look at me I’m in a new(ish) expensive car’ ….would the boasting car ownership decline?

        • libertarian
          Posted November 21, 2019 at 11:06 am | Permalink

          Willoicc

          Its called consumer choice and as a British based business I’m more than happy to compete . Protectionism NEVER works, its a downward spiral. Dont do it

          • dixie
            Posted November 22, 2019 at 5:52 am | Permalink

            Works for Germany, China, France, USA, Japan …

            I’d be interested to know which country does not practice protectionism – eg where government does not favour local manufacturers, discourage foreign takeovers of significant business.

  37. Sue Doughty
    Posted November 20, 2019 at 1:00 pm | Permalink

    Yes, cutting Stamp Duty would be better for the economy

  38. Gareth Warren
    Posted November 20, 2019 at 1:26 pm | Permalink

    Here while lower taxes are always good I would aim to cut the cost of employing people and thus encourage companies to employ more. So national insurance would be a better target.

  39. Rule Britannia
    Posted November 20, 2019 at 1:30 pm | Permalink

    I believe it would increase the tax take. We can examine what’s happened in Eire over the last few years when their rate was a low as 15%(?).

    What I would prefer to see is that tax is levied based on UK transactions. The ability of multinationals to shift profits away to be taxed elsewhere is a blight on the world economy. It disproportionately provides advantage to small economies being run as tax havens which have little or no infrastructure or population to support with their tax take.

    We will never see a unanimous global approach to this problem, so we must ask “What can we do unilaterally to prevent profits being shifted elsewhere?”.

    To me, the answer is that UK law should expect that taxes are paid in the UK on profits on transactions that occur on UK soil or that involve UK entities (people, companies or pension funds). Companies trading within those bounds should be required to produce accounts in those terms – where it is NOT a tax deductible item if monies have been shifted elsewhere for “investment”. If they wish to do that, then they must do it with taxed monies.

    And… HMRC must be given a very clear remit that they must pursue any tax to the penny. No more shady deals with big companies while they go though individuals’ affairs with a fine tooth comb, accounting to the penny and adding highly punitive interest and penalties.

  40. John P McDonald
    Posted November 20, 2019 at 1:46 pm | Permalink

    It is not clear to me that if, and when, we leave the EU we will be Totally free to set TAX.
    The PM knows the details of the deal so it maybe true what he says that he can’t cut Corporation TAX because we will still be bound by EU regulations after we leave. Probably just getting around to reading the small print of the deal.
    Local business rates in Wokingham are another factor killing off the local shops and local business.
    Maybe try getting the true tax out of Amazon and the like to help the NHS. And all the profits from Rail and the Utilities.

  41. Gordon Hetherington
    Posted November 20, 2019 at 2:16 pm | Permalink

    Politicians often talk about simplifying our massively complex tax system but rarely deliver – Chancellors are ever attracted by the prospect of favourable post-budget headlines for this measure or that. The result is a mish mash of taxes, reliefs and anti-avoidance legislation that requires expensive professional advice to navigate.

    I would like taxes to be re-examined to ensure:

    1. Ease of administration both for tax collector and taxpayer,
    2. Minimising damage to economy / society, and
    3. Contributing to the reversal of climate change.

  42. Iain Gill
    Posted November 20, 2019 at 2:42 pm | Permalink

    I see the Lib Dems are promising to sort out IR35

    At least trying to get the votes of the freelancer community

    Who you would have thought the Conservatives would want as voters

    • Lifelogic
      Posted November 20, 2019 at 6:26 pm | Permalink

      Ir35 is just another very inefficient back door tax increase and job creation scheme for parasitic workers and regulators. We need free contract between people and companies. What drives self employment is moronic and restrictive employment laws. Get the parasitic state and parasitic lawyers out of the damn way. Let the productive produce!

      • Mark B
        Posted November 21, 2019 at 4:07 am | Permalink

        Agreed. But there is a real issue with some contract workers leaving their permanent job on a Friday and starting the same job at the same company at the same desk on the following Monday. This cannot be right. There has to be a break of between leaving and rejoining a company of say 1 year.

    • a-tracy
      Posted November 21, 2019 at 11:04 am | Permalink

      Iain, the biggest problem with IR35 is the confusing and complicated rules. So much so that I have a company today trying to sell me a training package for £267+ VAT just to understand what obligations SMEs are under from April 2020.

      To put it simply IR35 is a crackdown on companies that rather than have PAYE workers have people performing duties for them on a regular daily/weekly basis without employment contracts and all that entails including employers national insurance; Nest; SSP, SMP, SPL cover and holiday pay during this leave; holiday pay and overtime averaged holiday pay; and removes the inability to lay anyone off.

      However, the government loses a lot of tax if the self-employed operative uses every trick in the book not to pay sufficient taxes and doesn’t contribute an employer’s national insurance.

  43. Cliff. Wokingham
    Posted November 20, 2019 at 4:55 pm | Permalink

    I would like some honesty in the spending pledges the politicians are making.
    Instead of we are giving or investing so many billions or millions to this or that, how about saying we’re going to take so many billions or millions from you extra in taxation.

    We need a grown up debate, without the emotive language and emotional blackmail, to decide just what we want the state to do for us.
    Our host did a lot of work in relation to the bonfire of the quangos but it was all kicked in to touch. We now have more quangos and other busy bodies than we’ve ever had.

  44. mancunius
    Posted November 20, 2019 at 7:00 pm | Permalink

    Surely a cut in corporation tax would most help the UK economy (and be least likely to attract EU protectionism and ECJ fines) once we have actually – and entirely – left the EU. Our economy will then be governed by UK domestic policies.
    Once we have really left (i.e. after the extension period), I think it highly likely that a cut in corporation tax (plus other pro-business policies) would attract corporates and thereby increase taxation revenue.
    But if we do it now, we’re just telegraphing our shots to Brussels, and giving Paris and Berlin a chance to interfere during the extension period (e.g. via new laws or ECJ fines). The EU will certainly be already thinking up methods of intimidating globals who might want to base themselves in a non-EU UK.
    The next government and parliament had better realize that getting Brexit ‘done’ is not accomplished merely by making a pseudo-treaty to ‘leave the EU’, but by domestic laws that implement radical economic pro-market reforms.

  45. tim
    Posted November 20, 2019 at 9:22 pm | Permalink

    A foreign national opens a “Barbers”, a “hand car wash” , “window cleaning”. Now how would these make money? In their own country NO Chance! However, in UK, open business, get fellow foreign nationals to work 16 hours a week. On paper pay 16 hours a week. This allows foreign nationals to get: working tax credit, child tax credit, housing benefit, child benefit, free health, free schooling, free legal aide, and much more. Thousands of pounds a month. The “foreign national workers” then pay the Boss about ¼ of their total income. Hey presto you are rich! Truth painfull is it JR?

  46. Lindsay McDougall
    Posted November 21, 2019 at 2:39 am | Permalink

    I think that revenue would fall were corporation tax to be cut further, although I cannot prove it. You would probably need to analyse the effect on revenue of corporation tax increases and cuts in many countries before coming to a definitive conclusion.

    The PM has realised that a public spending bonanza and tax revenue reductions are not a good fit. This small measure of fiscal prudence is welcome.

  47. Edwardm
    Posted November 21, 2019 at 10:54 am | Permalink

    I don’t know the optimum corporation tax rate – but an inclination by government to wish to lower the rate is better than the reverse.
    Tax relief on R&D and new infrastructure and on employee training could be more useful.
    My main concern is for those things that are taxed at much higher rate – especially when it is much over 33%.
    Also stamp duty on housing is too high, as are business rates on small businesses.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

    Promoted by David Edmonds on behalf of John Redwood both of 30 Rose Street Wokingham RG40 1XU

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