George Osborne has pledged to cut corporation tax to 17 per cent by April 2020 – which will be funded by chasing tax from multinationals – as part of plans to help the "millions of firms who pay their fair tax", he said today.
The chancellor pledged to "get rid of loopholes for multinationals and tax for small businesses" with his dual plan, which will target mega-corporations that "deliberately over-borrow in the UK".
From April next year, he pledged to restrict interest deductibility for the largest companies at 30 per cent of UK earnings, and set new "hybrid mismatch rules to stop the complex structures that allow some multinationals to avoid paying any tax anywhere, or to deduct the same expenses in more than one country".
Saying the Conservatives were a government who "lower tax", rather than raise it, he unveiled a string of measures to tackle tax avoidance by the one per cent of firms with profits of £5m of more.
This would raise an extra £9bn for the Treasury, through which he would be able to lower corporation tax.
"Britain is blazing a trail," said Osborne. "Let the rest of the world catch up."
He added. "All of these reforms to corporation tax will help create a modern tax code that better reflects the reality of the global economy."