Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of the UK's tax regime on foreign direct investment competitiveness.

The UK has considerable economic strengths. It is the second largest services exporter in the world, the second most attractive location to invest in Europe and is ranked sixth in the Global Innovation Index.

Investment is at the heart of the government’s growth mission and is one of its key pillars alongside stability and reform. The UK continues to champion free trade and global investment, supported by over 70 international trade agreements and a competitive tax regime. Our stable fiscal rules and competitive tax system enable international firms to invest confidently and drive innovation across advanced manufacturing, clean energy, and digital technologies.

Investment is critical to growth and we are taking further steps to make the UK the most attractive destination for global investment. As confirmed at the Budget in November 2025, the government has committed over £120 billion of additional departmental capital spending over the course of the Parliament. This investment is being directed to infrastructure and planning priorities that support growth, including supporting regional growth by bringing new affordable homes and improved transport connectivity to more places and supporting energy and net zero priorities through new nuclear power. The National Wealth Fund and the British Business Bank are catalysing private investment and the new National Housing Bank will extend that catalytic effect to the housing market. The strategy is working: the UK is attracting international investment, with £150 billion of new confirmed inward investment commitments at the US State Visit in September and further commitments at the Regional Investment Summit in October.

In addition, following the commitments in the Corporate Tax Roadmap in 2024, the government continues to maintain the parts of the UK corporate tax offer that are most important for attracting new investment: a low Corporation Tax main rate of 25% - the lowest in the G7 - a flexible and competitive regime for intangible assets, the Patent Box, and one of the most generous and competitive capital allowances regimes in the world.

The UK is an attractive location for groups to locate their headquarters or holding companies, offering broad exemptions for gains on disposals of substantial shareholdings and a broad exemption for dividends paid to UK companies. There are also limited withholding taxes on outbound payments such as dividends, interest and royalties.