British businesses do not want further corporation tax cuts for fear of alienating the general public.
The consensus opinion across the UK's companies is that corporation tax is not a "defining feature of tax policy". This means that the benefits of a cut are outweighed by negative publicity attached to business’ role in the tax system, according to a study prepared by accountants PwC.
The majority of businesses polled (71 per cent) said that corporation tax rate should either stay at 20 per cent or at least should not go below the 17 per cent level the government is planning to introduce from April 2020.
PwC's head of tax Kevin Nicholson said that British firms recognise the benefits of paying less in corporation tax but are acutely aware that "it’s not the be all and end all".
The analysis revealed that firms felt that they had an important role to play in building trust and transparency in the tax system.
"There comes a point when rate cuts have diminishing impact and can send unhelpful messages about business’ contribution, even though corporation tax is just one of the taxes business bears. Businesses think there should more focus on the taxes that generate the most revenue such as national insurance contributions and VAT,” said Nicholson.
The news comes just two weeks after Theresa May was reportedly considering slashing corporation tax to 10 per cent in an attempt to attract companies to the UK post-Brexit.