{"id":25246,"date":"2014-06-25T07:43:05","date_gmt":"2014-06-25T06:43:05","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=25246"},"modified":"2014-06-25T07:43:05","modified_gmt":"2014-06-25T06:43:05","slug":"uk-corporation-tax-policy-fails-to-attract-new-business-as-foreign-direct-investment-falls","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2014\/06\/25\/uk-corporation-tax-policy-fails-to-attract-new-business-as-foreign-direct-investment-falls\/","title":{"rendered":"UK corporation tax policy fails to attract new business as Foreign Direct Investment falls"},"content":{"rendered":"

From the time that the current government came into power corporation tax reform has been one of their key objectives. The result has been a cut in the tax rate<\/a> from 28\u00a0\u00a0<\/span>% to 21% now with 20% to follow, and a cut in the tax base, meaning that whole swathes of income have fallen out of the scope of the tax. The latter process has created a territorial tax system for the UK<\/a>. The aim was unambiguous. As the government said of this policy<\/a>:<\/span><\/p>\n

The Government wants to send out the signal loud and clear that Britain is open for business.<\/p>\n

We must do all we can to support a private sector recovery. The UK is an open economy and many of the best known businesses in the world are located in the UK, generating growth, creating jobs and making a significant contribution to the public finances. We want to see those businesses grow strongly over the coming years, and attract new ones to join them.<\/p>\n

In recent years too many businesses have left the UK amid concerns over tax competitiveness.<\/p>\n

It\u2019s \u00a0time to reverse this trend. Our tax system was once viewed as an asset. And it needs to be an asset again.<\/p><\/blockquote>\n

In that context it is interesting to note a report in the FT this morning that says<\/a>:<\/p>\n

Foreign direct investment into Britain fell 19 per cent last year to $37bn despite a\u00a09 per cent rise<\/a>\u00a0in global flows to $1.45tn, according to the World Investment Report from the UN Conference on Trade and Development (Unctad).<\/p><\/blockquote>\n

The open door has not been an attractive invitation.\u00a0The tax cuts have not lured business.<\/p>\n

The policy appears to be an outright failure. Far from attracting more money, less money has come than before.\u00a0But the cost has been enormous. I have estimated that this policy of tax rate and tax base cuts may cost the UK up to \u00a310 billion a year<\/a>.<\/p>\n

In that case this has to be seen as either an outright failure of government policy or, alternatively, as part of a deliberate exercise to make big business better off at the expense of the rest of us. Another explanation is hard to find.<\/p>\n","protected":false},"excerpt":{"rendered":"

From the time that the current government came into power corporation tax reform has been one of their key objectives. The result has been a
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