Sunak to push ahead to increase UK corporation tax rate back to 25%
British prime minister Rishi Sunak speaking at a Coca-Cola plant in Lisburn last week.
British prime minister Rishi Sunak has rejected calls from his own Conservative Party to cancel a rise in UK corporation tax due to come into force next month, according to a person familiar with government plans.
The levy on business profit is scheduled to rise from 19% to 25% in April, prompting demands to stop the increase in a bid to encourage investment.
Last week, former prime minister Boris Johnson publicly called for UK corporation tax rates to match Irish levels or lower, arguing Mr Sunak was not exploiting the benefits of leaving the European Union.
Supporters of former prime minister Liz Truss, who have formed a Conservative Growth Group, have also asked chancellor of the exchequer Jeremy Hunt to halt the planned rise, according to a person familiar with their submission to the UK Treasury.
Buoyed by widespread support for the Brexit deal signed with the European Union last week, Mr Sunak is in an increasingly strong position to stare down Tory detractors over his budget plans.
During his own term as chancellor, Mr Sunak planned a targeted relief for business investment to operate alongside the headline tax rise. There is no similar plan in place at the moment but Mr Hunt has said business tax cuts are his priority.
Ahead of the UK's budget on March, an improving picture in the public finances is encouraging senior ministers to step up pressure on chancellor Jeremy Hunt.
Two cabinet members have floated the idea that Mr Hunt should either scrap or curtail a planned rise in corporation tax.
A third, business secretary Kemi Badenoch, has privately indicated she wants to see the main rate cut, according to people briefed on those conversations, though she is also lobbying the chancellor on other mechanisms to reduce costs for businesses.
•Bloomberg
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