The government's head tax strategist has maintained that slashing corporation tax will be post-Brexit Britains key to success.
Conservative MP Mel Stride, financial secretary to the Treasury, told City A.M. yesterday that bringing corporation tax down to 17 per cent by 2020 was vital to keeping the UK competitive after Brexit.
The UKs corporation tax rate is currently 19 per cent, and is already the lowest of all the G7 industrialised western economies.
“There are challenges ahead undoubtedly with Brexit,” Stride said.
“Im always aware of being on the side of businesses – at the end of the day, they create the jobs that create the wealth that pays the taxes that funds the vital public services on which we all depend.”
Stride was speaking at a visit to venture capital firm Hambro Perks, discussing how best to support UK growth companies.
He said he would look into how the British Business Bank could make direct investments in small companies, rather than ploughing money into venture capital funds which cream off fees.
"What we don't want is politicians and officials and bureaucrats to be deciding what constitutes a good investment opportunity. I think the funds provide a vital input in terms of deciding where to invest," Stride explained.
"But equally, there is the point that there are costs associated with going through funds, so it's an area that I will certainly look at."
Stride added that clamping down on the tax paid by US tech giants was another priority.
"These are businesses which under the current international tax regime are not having their profits fairly captured. There's no case of avoidance, but they are generating huge value through the interactions of the users who are based in the UK and the actual site itself," he said.
The UK is still working with the EU and the Organisation for Economic Co-operation and Development (OECD) to potentially move to revenue-based, rather than profit-based, taxation, Stride added.