A reduction to the main rate of corporation tax due to take effect in April 2020 has all but hit the buffers.

Prime Minister Boris Johnson told business leaders at a Confederation of British Industry (CBI) conference to say corporation tax will not reduce from 19% to 17%.

"I hope you understand that it is the fiscally sensible thing to do," said Johnson, who went on to claim the U-turn will save the Treasury £6 billion in 2020/21.

Carolyn Fairbairn, director-general at the CBI, said it could "work with" Johnson's decision on corporation tax as long as there were improvements in other areas.

The decision to slash the main rate of corporation tax by 2% was made by former chancellor George Osborne and legislated for in Finance Act 2016.

Labour and the Greens want to raise the main rate of corporation tax - to 26% and 25% respectively - if they win the election on 12 December 2019.

Around two million trading companies in the UK are liable to pay corporation tax at 19% on any company profits in 2019/20.

Last year, official government figures showed that corporation tax netted the Treasury £55.1bn.

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