Zahawi promises to scrap planned corporate tax hike

Nadhim Zahawi, Britain’s chancellor and candidate for prime minister, has said he would scrap a planned corporation tax hike next year if he wins the Tory leadership race.

Under his predecessor Rishi Sunak, the tax was due to rise from 19% to 25% in April, generating an additional £17bn a year.

But speaking at a Conservative leadership campaign event at the Churchill War Rooms in Whitehall, Zahawi said he had ‘set the wheels in motion to scrap the planned corporate tax hike’ .

Zahawi also announced plans to cut the basic income tax rate to 19p in 2023 and 18p in 2024 if elected the next Conservative leader. ‘It will bring households £900 a year on average,’ he said.

He also said he would cut value added tax and green levies on energy bills for two years.

The pledges would amount to tax cuts worth tens of billions of pounds and sparked fresh concerns about a black hole in public finances, although Zahawi said he could find savings in reducing public spending.

Shadow Chancellor Rachel Reeves has described the Tory leadership race as a ‘festival of irresponsibility’ as the 11 candidates between them promised £330billion in tax cuts.

However, outgoing Prime Minister Boris Johnson has made it clear that no change in government policy will occur during the eight weeks he leads a caretaker administration.

Most Tory leadership candidates have pledged tax cuts, with the exception of Rishi Sunak, who said the corporate tax hike was needed as part of a fiscally prudent approach to business. public finances.

Former Tory Chancellor Lord Norman Lamont told the BBC he fears the competition could turn into a “Dutch auction of tax cuts” which may not be affordable.

“There is a danger at this point where the public finances, the amount we borrow, are not in a solid state,” he said. “Debt could skyrocket from 100% of GDP to possibly double if we don’t have tight control of our finances.”

Meanwhile, Zahawi said reports he was being investigated by HM Revenue & Customs about his finances were “defamation”.

“I have always declared my taxes. I paid my taxes in the UK. I will answer any questions HMRC puts to me, but I will go further. I will commit today,” he said. “If I am Prime Minister, I think the right thing to do is to publish my accounts every year.”

However, the Chancellor separately clarified that his promise to publish annual tax returns only applied to future years and not to the period when he was a successful entrepreneur before entering politics.

Asked by Sky News in the morning, he was asked about his promise to release his tax returns. “If Prime Minister, I will release them in the future… I don’t think being retrospective is fair,” he said. “I was in business, I got out of it, of course , I am now in politics.”

Zahawi made his estimated fortune of £100m as a co-founder of polling firm YouGov.

Gibraltar-based Balshore Investments was previously described in YouGov annual reports as “the family trust of the family of Nadhim Zahawi” and held a stake in the company worth more than £20million before it will not be sold in 2018.

Zahawi said he never had an interest in Balshore Investments and that neither he nor his wife nor their children were beneficiaries. Instead, a spokesperson said his father, Hareth Zahawi, who lives overseas, owned Balshore.