Labour backs 25 per cent corporation tax rate amid calls to scrap rise ahead of budget

CPS Research Director and Head of Tax, Tom Clougherty, spoke to City AM about Labour’s review of the UK tax regime.

He said more generous investment allowances would be “interesting” after Labour already said it would scrap business rates.

“Both could be excellent moves if the policies are designed and implemented effectively,” he told City A.M. “Businesses will also like the certainty that a tax roadmap could give.

“But there’s also plenty of scope for Labour to get things wrong – for instance by politicising the business tax system to make everything fit a particular green agenda.

“Their goal really should be tax neutrality – removing the massive disincentives to investment that currently exist throughout the tax system, but without introducing new distortions of their own.”

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Date Added: Tuesday 7th March 2023