UK businesses benefit from lowest corporation tax rates
Headline corporation tax rate in UK just one fifth (21%) of taxable profits on $1m for financial year ending 2015
UK businesses benefit from one of the lowest corporation tax rates of all the major G7 economies, new research from UHY Hacker Young has indicated.
The study showed that, when compared with the US, Canada, Germany, France, Italy, and Japan, the UK’s headline corporation tax rate accounted for just 21% on taxable profits of $1m for the financial year ending 2015 – second only to Russia.
This is markedly lower than the global average of 27%.
This headline rate was decreased from 24% in the years 2013 to 2014 and is set to drop still further, reaching 18% by 2020 as the government looks to boost the economy.
See also: Corporation tax explained
The new research lends to the argument given by Central Working’s James Layfield that the UK is one of the best and most hospitable places to start a business.
Roy Maugham, tax partner at UHY Hacker Young, said: “At more than 10 percentage points lower than the G7 average corporation tax rate, the UK now has one of the most competitive regimes in the world. This is benefitting UK-based companies of all sizes.”
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Read more about corporation tax and when you will have to start paying it in our guide.