Chancellor cuts corporate tax rate to 21% The corporate tax rate will be cut by a further point to 21 per cent in 2014, in a move that George Osborne described as an "advert for our country" that would leave other nations scrambling even harder to keep up. But the chancellor offset the cut with a £545m a year increase in the bank levy and the closure of avoidance loopholes, designed to raise about £300m a year. Mr Osborne said he wanted to ensure that multinationals paid "their proper share of taxes" through enhanced enforcement and an international effort to prevent "artificial transfers of profits to tax havens." He added: "We want the most competitive corporate tax system of any major economy in the world, but we expect those corporate taxes to be paid." Chris Morgan of KPMG, the professional services group, said: "There is a clear message: we are open for business but we want you to play fairly." Mr Osborne left the small companies tax rate at 20 per cent but announced a tenfold increase in the annual investment allowance in plant and machinery. From January £250,000 of investment will qualify for 100 per cent relief - a move that will cover the total annual investment undertaken by 99 per cent of all UK businesses. The announcement is a reversal of the cut in allowances from £100,000 to £25,000 in April this year. Chris Sanger of Ernst & Young said the "yo-yo" approach to capital allowances demonstrated their role in stimulating investment. It is right to stimulate investment when it is needed. Mr Osborne said that a deal with Switzerland concerning undisclosed bank accounts of UK residents was set to generate £5bn over the next six years, in the largest tax evasion settlement in British history. The Treasury said it expected its action on tackling avoidance and evasion would secure additional revenues of £22bn a year by the end of this parliament, a 70 per cent increase since 2010-11. HM Revenue & Customs said it was taking immediate action to block three avoidance schemes.