Tax cuts to large corporations in the UK are projected to cost the Government billions more than originally forecasted.
The Treasury recently announced that it would be cutting taxes to the annual profits that each company based in the UK makes from 19% of their total profits to 17% by 2019, making the UK have the lowest corporate tax rates in Europe.
The forecast came from HMRC data on current corporate tax rates and suggested that the loss of revenue from a corporate tax cut could lead to a catastrophic loss in spending for the Government, while HMRC data also showed that raising corporate tax by just 1% could raise over £3 billion a year in tax revenue for the government.
This coincides with findings today that showed the scale of how Austerity cuts have affected Northern UK Cities, with up to 40% of local government spending being cut among the most deprived regions in the country, while corporations continue to see their taxes plummet.
The plans were originally announced by George Osborne, the former chancellor to the Coalition government which ended in 2015, but were later picked up again by the current chancellor, Philip Hammond, despite also facing calls to raise over £20 billion for the NHS by 2024 to keep vital health services funded.
A treasury spokesperson seemed optimistic that the strength of the UK’s Economy, even with the shadow of Brexit looming, would allow for a greater collection of corporation tax in 2020 than in the current year. However, Labour has made it one of their core goals to reverse these cuts if they are elected into power and divert the extra funds into public services spending.