Truss’ corporate tax U-turn will ‘get less attention in the boardroom’

Kwarteng, who unveiled plans to halt a planned corporation tax hike in a ‘mini budget’ last month, was promptly sacked by Liz Truss on his return and replaced by former Health Secretary Jeremy Hunter. Following the reshuffle of No 11, the Prime Minister told a press conference that she remained committed to delivering “a low-tax, high-wage, high-growth economy”. But she admitted it was ‘clear that parts of our mini-budget have gone further and faster than markets expected’ and pledged to reassure investors of the ‘fiscal discipline’ of his government.

Morley said: “The Government will no doubt want to remind businesses that at 25% UK corporation tax remains competitive with other major economies including the US, Germany and the UK. France. As far as we know at this stage, the other business incentives announced in the mini budget will continue, including the increase in the annual investment allowance to £1m, which has been welcomed by companies and will be an added benefit with the rate returning to 25%.

But he warned that a lack of detail provided by ministers on the remaining aspects of the mini budget risked slowing investment in the UK economy. “Other proposals, such as the introduction of investment zones, still lack detail and companies would appreciate more detail as soon as possible if these proposals were to generate growth. The lack of detail is currently more likely to slow investments than to encourage them, because companies are waiting to see where they should invest to take advantage of tax incentives.