The UK is open for business! £3bn cut slashes corporation tax to the lowest rate of any major western economy

In a surprise move George Osborne said the rate will drop to 21 per cent in 2014

It is the fourth time the Chancellor has used either a budget or an autumn statement to cut the key corporate tax rate

Official Treasury figures show it will save firms £415million in 2014/15 -  rising to £785million the following year

Large businesses yesterday scooped a £3billion tax cut which will slash corporation tax to the lowest rate of any major western economy.

In a surprise move, George Osborne said the rate will drop to 21 per cent in 2014, sending a clear message that Britain is ‘open for business’. 

It is the fourth time the Chancellor has used either a budget or an autumn statement to cut the key corporate tax rate.

In May 2010 – the month Mr Osborne became Chancellor – corporation tax was 28 per cent for large businesses which make profits of more than £300,000 a year.

The tax cut is significant. Official figures, published yesterday by the Treasury, show it will save firms £415million in 2014/15, rising to £785million the following year.

In the following two years, it will be worth £875million in each year, making a total of £2.96billion.

The Chancellor, the son of two entrepreneurs, said he wanted Britain to have ‘the most competitive business tax regime of any major economy’.

He said the tax cut was ‘an advert for our country that says, “Come here, invest here, create jobs here. Britain is open for business”.’ 

Richard Baron, head of taxation at the Institute of Directors, the business lobby group, said the move should help the private sector to create jobs at a time when unemployment is 2.5million.

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