The cut in
mainstream Corporation Tax won't directly help smaller businesses, but it will help to attract overseas businesses to set up in the UK.
The
mainstream corporation tax rate will fall to 23% this April and 21% from April 2014, making the UK one of the most competitive
mainstream corporation tax rates of major western economies.
And while net finance expense for the first six months is expected to increase due to a pounds 200m index-linked loan with the European Investment Bank and slightly higher inflation costs on its index-linked debt, a deferred taxation credit of pounds 50m is due, following the Government's decision to cut
mainstream corporation tax from 26% to 25%.
Mr Jewkes, tax partner at Grant Thornton in Birmingham, said: "We have known for a long while that the
mainstream corporation tax rate was scheduled to come down, but it is disappointing that this cut will now be introduced in phases.
In order for the UK to stand out from the competition, the Chancellor could announce a programme of future postelection reductions in the
mainstream corporation tax rate.
All of this was set off against a levy which is sometimes called "
mainstream corporation tax" or MCT.
EIGHT of the 10 companies had paid no
mainstream corporation tax on their core water and sewerage businesses.
"Despite headline announcements in this year's Budget of dropping the basic rate of income tax, aligning national insurance contributions and reducing
mainstream corporation tax, the reality is that other increases will lead to a maintenance of the status quo," said Ms Lagerberg.
Mainstream corporation tax to be cut from April 2008 to 28p - down from 30p.
If the trust satisfies these criteria, it does not have to pay
mainstream corporation tax on its income.