Corporation tax receipts are up 50% after rate cuts Labour want to scrap

CORPORATION tax receipts have actually soared by more than 50 per cent since the levy was slashed by the Tories, figures revealed yesterday.

The main rate of corporation tax was 28 per cent when David Cameron became prime minister in 2010 but it has since been cut to 19 per cent.

The reduction has coincided with a surge in receipts as corporate profits increased in the recovery from the financial crisis and recession. Experts also believe a crackdown on tax avoidance by big companies has swollen Treasury coffers even as the tax rate was cut.

Labour has pledged to raise corporation tax to 26 per cent for big business and to 21 per cent for small firms – hammering companies across Britain.

Analysis of official figures by the Mail shows businesses paid £36.2billion in corporation tax in 2010-11 when the main rate was still 28 per cent following years of Labour rule. The tax take has rocketed since then and hit a record £55.1billion last year when the levy was just 20 per cent.

Corporation tax was cut again this year to 19 per cent and is due to reach 17 per cent in April 2020 under plans outlined by former chancellor George Osborne and backed by his successor Philip Hammond – at least until now.

The Chancellor is under pressure from some quarters to announce a change of tack in the Budget tomorrow but experts last night urged Mr Hammond to press ahead with the planned cuts in corporation tax. Mark Littlewood, director general of the Institute of Economic Affairs, said: ‘Raising it would damage long-term growth, cost jobs and force wages down.’

THIS paper has always argued that high business taxes not only stunt economic growth and crush job creation, but are also profoundly counter-productive. They are meant to increase the overall tax take but frequently have the opposite effect.

It’s not exactly rocket science. The more the state saddles private enterprise with punitive levies, the lower their profits – and the fewer people they can afford to employ.

And this self- evident truth is starkly proven by figures we publish today on the amount of Corporation Tax collected by HMRC in recent years.

In 2010, when the tax was levied at 28 per cent, it gave the Treasury £36billion. Now, it has fallen to 19 per cent – but the yield has rocketed to a massive £55billion, a rise of more than 50 per cent.

Meanwhile, an unprecedented number of jobs have been created and unemployment is at a 40-year low. In a period when global growth has been sluggish to the point of stagnation, this is a thundering endorsement of the virtues of a low-tax economy.

Philip Hammond should bear this firmly in mind as he prepares for tomorrow’s Budget. And he should not only keep cutting Corporation Tax (unlike Jeremy Corbyn who, insanely, wants it put back to 28 per cent) but also seriously consider slashing personal taxation.

What better way to show the world that Britain is truly open for business?