Britain’s Tax Competitiveness Plummets as Businesses and Investors Flee
Bad news for fans of economic growth this week as the US-based Tax Foundation releases their International Tax Competitiveness Index, which ranks 38 OECD countries on how pro-growth their tax systems are. The UK ranks a shameful 30th place, now lagging behind the likes of Hungary (7th), Czechia (8th), and even Germany (15th). So much for lofty promises of making Britain an “attractive” destination for investors…
Since 2021, our corporate tax competitiveness has nosedived 18 places, thanks to Sunak hiking it to 25% – a rate that’s set to stay. Things are poised to get worse, with the Tax Foundation and Centre for Policy Studies sounding the alarm that Reeves’ upcoming budget could see the UK tumble even further down the rankings to 35th place if hikes in capital gains tax, dividend tax, or the dreaded wealth tax materialise. Just four spots from the bottom, alongside France, Italy, and Colombia. Hardly a prelude to growth…
Daniel Herring of the CPS warned:
“In short, there is a real danger that we could end up with the least competitive and most anti-growth tax system in the OECD. The UK’s ranking shows that the way we raise tax is damaging incentives, getting in the way of innovation and undercutting productivity.”
Right on the money…
Meanwhile, capital is already streaming out of the country, and businesses are fleeing in droves. These latest figures aren’t the siren calls that will bring investors flocking…