Britain the New Tax Haven

Britain the New Tax Haven.

George Osborne, Chancellor of the Exchequer, has set out a five-point plan for the United Kingdom to prosper on the global stage when this country leaves the European Union.

His plan is plain and simple (apparently):

• Make sure the banking sector is fully supported with enough liquidity to prevent any "runs"
• Keep Britain credible
• Increase trade links and investment from the Far East (China etc)
• Further development and investment in the "Northern Powerhouse"
• Make Britain's taxation the most competitive in the Western world to encourage large corporations to invest in Britain

In making these suggestions, the Chancellor suggested in an interview in the Financial Times that corporation tax could be reduced to below 15%. This is clearly a strong message to encourage corporate setup in the UK although given that already Ireland has a corporation tax rate of 12.5%, may be not enough. Certainly, global organisations that are looking to access the European market will no doubt still prefer Ireland.

That said, given the size of the UK population at 65 million+ and one of the world's largest economies, corporate's cannot simply ignore the UK if their focus is to make profit.

In addition, the Governor of the Bank of England, Mark Carney has suggested that interest rates will be cut further and with a combination of low borrowing costs, low corporation taxes, a large population and limited exposure to the euro (which many forget still has its own significant problems across southern Europe as well as France), it may be that whilst the UK is not a safe bet it is certainly a business bet worth considering.