Tax cuts dominate the proposals of the Conservative Party leadership contenders hoping to succeed Boris Johnson as prime minister.
Two candidates, the former chancellor Sajid Javid and the former health secretary Jeremy Hunt, have both pledged to reduce the UK’s corporation tax rate from the current 19 per cent to 15 per cent. This would reverse the former chancellor Rishi Sunak’s plan to raise corporation tax to 25 per cent by 2023.
The UK’s levy on businesses is already the lowest among the G20 and G7. In Germany, the combined federal and local statutory corporate tax rate is 30 per cent, while in France it is 28 per cent. In the US, a 21 per cent federal corporate tax rate combined with various taxes levied by states takes the rate to 26 per cent.
Hunt and Javid’s plans are only just acceptable under the global minimum corporate tax rate of 15 per cent agreed by the G20 last year. Ireland – which is not a member of the G20 or G7 – is notable for its low headline rate of 12.5 percent.
Other Tory leadership candidates, including Chancellor Nadhim Zahawi, Tom Tugendhat and Suella Braverman, have also sought to appeal to Tory MPs by promising tax cuts.