A few weeks ago George Monbiot wrote an article accusing the government of making one of “the biggest and crudest corporate tax cuts in living memory”. This article is Robert Peston’s response to that. If you’re into this sort of thing, it’s an interesting read. If you’re not, the short answer is that Cameron is not giving companies the mother of all tax cuts.
The government seems to be trying to do precisely the opposite of what Mr Monbiot accuses it of doing: it is trying to stem the exodus of companies and their assets abroad.
Which is not to say there is no cost to exempting branch dividends from UK corporation tax. The Treasury estimates it at £100m per annum by 2014/15, subject to confirmation by the Office of Budget Responsibility
That’s equivalent to 0.2% of all revenue raised through corporation tax, and 0.3% of UK corporation tax paid by multinationals, which will be the beneficiaries.
This is precious money given away at a time when the government is looking for brass farthings wherever they may lurk.
But unless you believe that a fiendish conspiracy of multinationals has somehow succeeding in gulling the Treasury and HMRC about the true cost of all this, it isn’t - to quote Mr Monbiot - one of “the biggest and crudest corporate tax cuts in living memory”.