Leading the charge in the UK’s financial recruitment sector, FD Capital is lobbying for significant tax reductions for individuals and corporations in the March budget, while criticising the rise in Corporation tax. The firm is urging the government to swiftly revert corporation tax to 19% or below to mitigate potential economic setbacks.
FD Capital’s strategy for achieving a 19% corporation tax rate in the March 2023 budget involves significant government spending cuts and a reduction in civil service numbers, both of which have been previously suggested by the government in the run-up to the general election this year.
Seen as the most economically damaging, corporation tax often results in its burdens being borne by employees and the broader public. A reduction in corporation tax is championed as beneficial across the economic landscape, enhancing wages and fostering international investment.
The trajectory of corporation tax reductions from 28% to 19% by 2018 was reversed when Rishi Sunak, then chancellor, announced an increase to 25% from April 2023, a move justified by the financial toll of the pandemic on government coffers. Liz Truss mooted the idea of reversing this increase during her tenure, which was later enforced by Jeremy Hunt as Chancellor in the Rishi Sunak administration in 2023.
It is a common misapprehension that the primary victims of elevated corporation taxes are the corporations themselves, whereas recent scholarship suggests that the impact is shared among business proprietors and employees earning lower wages.
In the wake of Brexit, the UK’s success hinges on its attractiveness as a global business hub. However, the competitiveness of the UK’s corporation tax rate is questionable, particularly in light of the Republic of Ireland’s lower rate of 12.5%.
FD Capital advocates for a reduction in corporation tax to 19%, arguing that it would invigorate the UK economy by enhancing its global competitiveness, thereby encouraging economic expansion through increased business confidence and investment.
Explore more about FD Capital and its contributions to economic and recruitment research at https://www.fdcapital.co.uk