HC Deb 01 February 1982 vol 17 c18W
Sir Brandon Rhys Williams

asked the Chancellor of the Exchequer what would be the gross cost of ending corporation tax; what would be the estimated cost in terms of net loss of revenue; and what increase would be required in the rate of value added tax in order to make good the net loss of revenue.

Mr. Ridley

The estimated yield of corporation tax in 1981–82 is £4.6 billion, of which £1.8 billion is advance corporation tax. If corporation tax were ended, the net cost would be approximatedly £3 billion since the loss of the yield of advance corporation tax would be almost entirely matched by a net increase in income tax receipts. To offset this loss of revenue, the standard rate of VAT would have to be increased from 15 per cent to about 20 per cent.