Britain's finance minister has announced plans to drastically reduce corporate tax in the nation still reeling from the pro-Brexit vote. The measure is aimed at tempting businesses to stay in the country.
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British Finance Minister George Osborne told the "Financial Times" that he was planning to cut corporate tax to less than 15 percent from 20 percent at present in an attempt to offset the shock to investors after the country's decision to leave the European Union.
While failing to specify a precise date for slashing corporate tax, the minister said he wanted to build "a super competitive economy" with low business taxes and a global focus.
A rate of under 15 percent would compare with an average of about 25 percent among other nations in the Organization for Economic Co-operation and Development.
Frankfurt the new London?
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'Making the best of it'
A drastic drop in corporate tax as envisaged by George Osborne could easily anger some EU countries, which have expressed concerns about competitive tax policies.
Reuters reported that the OECD had said it believed a further cut in corporate tax in Britain would "really turn the UK into a tax-haven type of economy."
Other elements of the finance minister's vision to steer the economy through the Brexit upheaval include ensuring support for bank lending, a bigger focus on business relations with nations outside the EU such as China and maintaining Britain's fiscal credibility.
hg/jd (Reuters, AFP)
Bye-bye, UK! We're leaving…
British businesses had repeatedly warned about the potential negative economic consequences from Brexit. And following the British vote to leave the EU, some firms are now considering relocating their operations.
Image: picture-alliance/dpa/W. Kumm
Vodafone
The second-biggest mobile telephone company in the world is considering the possibility of moving its headquarters out of the UK following Brexit. Should Vodafone decide to relocate, Düsseldorf could emerge as a top contender to host the head office. Vodafone already has a presence in the German city, where it employs about 5,000 people. Moreover, Germany is the company's largest market.
Image: Getty Images/AFP/M. Hayhow
Ryanair
Europe's biggest low-cost airline is officially based in Ireland, but a substantial portion of its fleet has so far been stationed in the UK. However, it is all set to change now, with Ryanair announcing that it would no longer station its aircraft there. The carrier also said it would no longer operate flights out of the UK.
Image: picture-alliance/dpa/M. Scholz
Easyjet
Europe's second-largest low-cost airline is based in London. But for how long? "That remains to be seen," said CEO Carolyn McCall during a TV interview this week. Easyjet is one of Europe's most profitable companies.
Image: Getty Images/AFP/F. Guillot
Virgin
Richard Branson is one of UK's most renowned business personalities. With regard to Brexit, he said: "Britain is heading for an economic disaster." His Virgin conglomerate has lost a third of its value since the British EU referendum vote. Brandon has urged the government to call a second EU referendum.
Image: Getty Images/AFP/D. Leal-Olivas
JPMorgan Chase
The biggest US bank employs 16,000 people in London. It is now mulling over plans to relocate a part of its British-based operations out of the UK. CEO Jamie Dimon had said prior to the referendum that between 1,000 and 4,000 jobs could be moved out of the City in the event of a Brexit.
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Visa
The credit card company will probably have little choice but to downsize its activities in the UK, leading to the slashing of hundreds of jobs. According to EU guidelines, the company must maintain a data center in an EU country. And that is likely to mean an end to the company's data center in London.
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Ford
Ford has repeatedly said the UK is a "key market" for the company in Europe. Ford's plant in Dagenham also supplies parts and engines to the firm's production sites in Germany. After the British decision to leave the EU, the company said it would take all necessary measures to remain competitive on the market.
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Jaguar Land Rover
Not all companies are pessimistic, however. "We are British and we stand by the UK," says Adrian Hallmark, strategy chief at Jaguar Land Rover. There have been no changes in our business plans, Hallmark assured, while the UK remains a full member of the EU at least for the next two years.
