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. Regional economies: The role of industrial strategy as a pathway to greener growth

    Regions like the North should have a key role to play in the development of a green industrial strategy.
  2. A mother and child walking in a field with hills in the distance

    Achieving the 2030 child poverty target: The distance left to travel

    On 27 March, the Scottish government will announce whether Scotland’s 2023 child poverty target – no more than 18 per cent of children in poverty – was achieved. 

  3. Spring statement: A changed world calls for a changed course

    If there are decades where nothing happens and there are weeks where decades happen, the last few weeks feel seismic.  The prime minister was right to say the world has changed. Donald Trump’s re-election in November has unleashed a wave…