By Max Clarke

Further cuts to the UK’s already low corporation tax rate would have any significant impact on job creation or the economy, and would further reduce revenues at a time when the government is most in need.

These are the findings from the Trades Union Congress’s Corporate tax reform and competitiveness report, drafted by chartered accountant and tax specialist, Richard Murphy.

Chancellor Osborne has announced that he is to cut the rate in a bid to entice companies to the UK, helping to stimulate the private sector recovery.

“The government has been seduced by employer calls for more corporate tax cuts,” commented TUC chief, Brenden Barber. “But while everyone wants to pay less tax, from multinational corporations to ordinary taxpayers, the argument that simply cutting corporation tax will fuel jobs and growth does not stand up to scrutiny.”

The report cites data from OECD (Organisation for Economic Cooperation and Development) countries to show that the UK’s corporation tax rate is already among the lowest in Europe. More than 90 per cent of UK businesses pay the small business rate of 20 per cent while the effective corporate tax rate for large companies is currently estimated by PriceWaterhouseCoopers to be 23.2 per cent, far lower than the OECD average of 26.5 per cent.

“UK corporate tax rates are already extremely competitive. And while some people, including the Chancellor, have talked about emulating the Irish economy's aggressive low tax policies, its current woes suggest this is not a sustainable economic model,” continued Barber.

The report cites data from OECD (Organisation for Economic Cooperation and Development) countries to show that the UK’s corporation tax rate is already among the lowest in Europe. More than 90 per cent of UK businesses pay the small business rate of 20 per cent while the effective corporate tax rate for large companies is currently estimated by PriceWaterhouseCoopers to be 23.2 per cent, far lower than the OECD average of 26.5 per cent.

“UK corporate tax rates are already extremely competitive. And while some people, including the Chancellor, have talked about emulating the Irish economy's aggressive low tax policies, its current woes suggest this is not a sustainable economic model,” continued Barber.

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