Former Home Secretary Priti Patel has urged the chancellor to use his budget next month to halt the planned increase in corporate tax.

The high conservative has defended that “now is not the time” for a tax increase on large companies.

In plans agreed to while he served in Boris Johnson’s cabinet, corporate tax will rise from 19% to 25% in April.

Ms Patel has also called on Chancellor Jeremy Hunt to withdraw from an international agreement that prevents corporate tax from falling below 15%.

Britain signed up to the deal by Prime Minister Rishi Sunak when he was chancellor, in a move brokered by the Organization for Economic Co-operation and Development (OECD) and announced by the United States.

Sunak, announcing the deal in October 2021 when Patel was home secretary, said it would lead to a “fairer tax system, with big global players paying their fair share wherever they do business.”

Speaking to the Daily Telegraph, Ms Patel said: “It is not too late for the chancellor to get behind business and end the current political obsession with regulation, high taxes and interference with business.

“The Chancellor must send a positive signal to companies in the Budget that supports employment and economic growth. Now is not the time to increase corporate tax.

Prime Minister's Questions
Rishi Sunak signed the UK’s international pledge not to cut corporate tax below 15% while Chancellor (UK Parliament/Jessica Taylor)

“Like the OECD deal issue, everything must stop for the benefit of companies across the country,” he added.

Hunt is due to present his spring budget on March 15, a day when civil service and transportation unions are in the crosshairs of strikes as part of long-running public sector disputes over pay and working conditions. job.

The chancellor is under pressure from his party’s right to cut taxes before the next election in a bid to jump-start Britain’s stagnant economy, which narrowly avoided recession last year.

Former Prime Ministers Johnson and Liz Truss are among those advocating the cuts.

The calls come despite the country’s tax burden (the ratio of taxes to a percentage of gross domestic product (GDP), a measure of the size of the economy) reaching its highest levels since the 1950s during Johnson’s time. in Downing Street.

Truss’s attempts to revive the economy – a wave of unfunded £45bn tax cuts announced by his chancellor Kwasi Kwarteng – sent the value of the pound tumbling and driving up mortgage rates in the autumn.

UK Green Industry Meeting
Chancellor Jeremy Hunt is under pressure to cut taxes in the budget (Stefan Rousseau/PA)

The tax burden under Mr. Sunak remains high after the fallout from Ms. Truss’s mini-budget.

Following Mr Hunt’s autumn statement in November, the Office for Fiscal Responsibility said plans for nearly £25bn in tax increases and over £30bn in spending cuts for 2027-28 would make the tax burden will peak at 37.5% in 2024/25. its highest level since the end of World War II.

Earlier this week, Hunt appeared to rule out a change of course on taxes after running a surprise monthly surplus in January thanks in part to lower-than-expected government borrowing.

The Office for National Statistics revealed that the government reported a surplus, when tax revenue received is greater than public spending, of £5.4bn last month, buoyed by record self-assessed income tax returns.

However, Hunt told reporters the numbers “were not as significant as people say.”

The UK government previously defended the planned corporate tax increase, saying it will “remain the lowest in the G7” even after April.


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