The Global Competitiveness Report for 2011-12 issued by the World Economic Forum lists the UK as the 10th most competitive country, its highest ranking since 2007. The report lists the UK as 94th least competitive in terms of the extent and effect of taxation.
The Government are taking action to repair the damage done by the previous Government and improve the competitiveness of the UK tax system. At the June Budget 2010, the Government set out their aim to create the most competitive corporate tax system in the G20 and has since set out more detailed proposals in its Corporate Tax Road Map (which is accessible online at: http://www.hmtreasury.gov.uk/corporate taxreform.htm). This includes four annual one per cent reductions in the main rate of corporate tax which, together with the further one per cent reduction announced in Budget 2011, will see the rate reach 23 per cent by 2014. Critical changes to the scope of corporation tax in order to enhance competitiveness will include the introduction of a patent box, to incentivise the creation of intellectual property in the UK and a new controlled foreign company regime, to make the UK a more attractive base for multinational groups.
The Government recognise that tax competitiveness is not just about rates and incidence of tax and have also committed to restoring the UK tax system's reputation for stability, simplicity and predictability. The Government have made a number of improvements to the way in which they make tax policy, with consultation on policy design and scrutiny of draft legislative proposals as the cornerstones. Further details may be found online at: http://www.hm-treasury.gov.uk/tax_policy_ making_new_approach.htm.