In 2013 the Chancellor of the Exchequer announced plans to reduce the corporation tax to 21% from 1 April 2014 and to 20% from the 1 April 2015. This reduction which has now come into force means that Great Britain has the lowest corporation tax rate of any of the G7 member states and the lowest joint rate in the G20.
In addition the UK has also unified its corporation tax doing away with main rates as opposed to small profit rates which was causing confusion and particular difficulties for groups where profits were not accrued evenly across all companies.
In 2010 when the coalition first came into power the corporation rate was at 28% meaning a drop of 8% in five years. The objective of this dramatic drop is to optimise conditions for business investment and growth by creating a more competitive, simplified corporate tax system.
If you would like to learn more about establishing a company in the UK or how the new tax rate compares to other favourable jurisdictions please do not hesitate to contact us.