Prime Minister Boris Johnson has set out a vision of the UK as a low-tax, more lightly regulated place to do business than any other European country, in a bid to woo US and Canadian investors.
In a speech to US business leaders, Mr Johnson promised to cut down taxes and regulations, which would likely provoke a hostile reaction from other EU leaders, particularly German Chancellor Angela Merkel, who has previously raised her concerns about the UK becoming an economic competitor after it leaves the bloc.
During his speech in New York, the Prime Minister said that the UK would take advantage of all the freedoms Brexit could give, including “new tax allowances for investment or speeding up public procurement contracts, or creating free ports and new enterprise zones”.
Mr Johnson said he was “rolling out the red carpet” to American investors by offering them a market that is “open to the world, with the most competitive tax rates and the best-skilled workforce in the hemisphere”.
The UK has already pledged to cut corporation tax to 17 per cent by 2020, making it one of the lowest in the world. However, to compete with Ireland, it would need to slash the rate to 12.5 per cent.
Critics have warned that the threat of future regulatory divergence between the UK and the European Union could complicate the immediate task of brokering a Brexit deal, particularly with the backstop plan.
Rob Chedzoy, Tax Partner at Milsted Langdon, said: “The proposals to reduce corporation tax are an indication of what the UK’s position may be post-Brexit. The Government must explore other markets and a reduction in tax rates and regulations would make the UK an attractive trading partner for the US, Canada and other nations around the world.
“For advice on matters relating to business tax, get in touch with our expert team today.”