Michael Spencer would gain £11.1 million from corporation tax reforms he is advocating. He believes that George Osborne may slash CT rates to 20 per cent.
The company founded by Conservative Treasurer Michael Spencer would gain £22.5 million from the corporation tax reforms he is advocating. The generous Tory donor believes that George Osborne may go further than the current Tory policy of slashing corporation tax rates from 28 to 25 per cent.
Spencer told the Financial Times:
“George Osborne – who I know extremely well and is indeed a friend of mine – has made it clear that the Conservatives will cut corporation tax to 25 per cent and potentially significantly lower than that.
“And I am hopeful that over the next Parliament (and I speak personally; I’m not speaking as an official spokesman for the Conservatives) that we will get corporation tax down towards the 20 per cent level under a Conservative regime. So that is good news.
“And the Conservatives have also made it quite explicit that this increase in the top rate of tax from 40 to 50 per cent, they see it as a temporary move. So I believe, and I hope, and I expect that that will be reversed in the foreseeable future.”
His company Icap posted pre-tax profits of £281 million in 2008/09. The existing Tory proposals to reduce corporation tax from 28 per cent to 25 per cent would save his company £8.4 million in tax over this period. A further decrease to 20 per cent would reduce Icap’s tax payments to £22.5 million in total. The Tory corporation tax cuts come at the expense of capital allowances, necessary to prevent further declines in investment.
Since the last election, Michael Spencer has given more than £100,000 to the Conservative party in individual cash donations as well as £86,464.50 in non-cash donations including travel. If a Conservative government were to bring in a 20 per cent corporation tax rate it would represent a 12000% return on his investment.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.