The five percent reduction in Corporation Tax that Brexit has forced us to offer to stay competitive will cost the British taxpayer a total of £750 million pounds per week in lost taxes. That is more than double the amount the Leave camp inaccurately claimed the UK was ‘sending to Brussels’ each week and around five times what the treasury calculated we really give to the EU. Of course there’s some bittersweet and somewhat ironic comfort to be taken in the fact that this amount of sterling is worth a lot less after the post-Brexit currency crash.
The fact is that leaving the EU makes the UK a lot less attractive to big international business, threatening private investment and public sector tax returns. So George Osborne had to offer a sweetener to lessen the negative impact of Brexit on public and private wealth. By reducing corporation tax from twenty percent to fifteen percent he may well convince a few more businesses to stay, and possibly some more to come to the UK, but he will lose a huge amount in public funds.
According to HMRC’s Corporation Tax Statistics for the year ending 2014*, the UK took £39.3 billion in corporation tax in that year. A little math shows that this equates to just over £755 million per week. Enough for three hospitals a week or one HS1 rail system every four years. Don’t worry though, there’s no chance of such expenditures happening after Ian Duncan Smith disowned the ‘let’s spend the £350 million on the NHS’ promise less than two days after leave won. Instead you can be happy in the knowledge that the money promised to your healthcare will be in the pockets of big business. Isn’t that nice?
- 2014’s figures are the most recent that this blogger could get hold of.