CPS proposes reducing corporation tax to 20%

A UK think-tank, the Centre of Policy Studies (CPS), has suggested cutting back the corporation tax to 20% (from 26%) in the 2012 budget. They believe that such a move will encourage businesses to grow and expand. The report acknowledges that such a decrease will result in loss of about £4 billion for the UK’s treasury but these will be easily offset by enhanced growth. The report, ‘How to cut corporation tax’, has been penned by tax lawyer David Martin and suggests that a fall in corporation tax will encourage growth and boost business confidence, encourage new investments and improve net returns.