How the UK’s corporation tax rate will remain the lowest in the G7

Rishi Sunak’s plan to increase corporation tax from 19 per cent to 25 per cent will still leave Britain with a lower rate than the US and others.

Chancellor Rishi Sunak during a press conference on the 2021 Budget in London. (Photo By Tolga Akmen – WPA Pool/Getty Images)

The UK will still have the lowest corporation tax rate of any major economy even after Rishi Sunak’s planned rise in 2023. Figures from the OECD show that increasing the UK’s rate from 19 per cent to 25 per cent would still place it behind the US, Canada, Italy, France, Japan and Germany.

The UK will host a G7 summit in Cornwall next month and the government is under increasing pressure to endorse Joe Biden’s proposal of a global minimum rate of corporation tax of at least 15 per cent (revised from an earlier proposal of 21 per cent). The aim of the policy is to claw back revenue from international corporate tax abusers, which the Tax Justice Network estimates costs world governments around $427bn a year.