THE UK is in danger of becoming globally uncompetitive if it does not reduce its corporation tax rate for larger companies, currently set at 30 per cent, says the Association of Chartered Certified Accountants.
The recent move by the Isle of Man to reduce its corporation tax rate from 18 per cent to zero per cent follows a trend in corporation tax reduction which is being set across the industrial world.
Countries such as Germany, Hong Kong, Singapore, Ireland, Norway and Sweden have all adopted corporation tax rates lower than that in the UK. Low corporation tax rates and a tax system which imposes low compliance burdens attract inward investment.
Richard Houghton, ACCA's spokesman for the South West, said: "The relatively low rates of corporation tax in other industrialised countries mean that new business capital will flow to those countries. Leaving the rate at 30 per cent could stifle further investment into the UK."
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