Budget 2011: Osborne cuts corporation tax even further
Another cut in corporation tax is the largest in a number of measures aimed at helping Britain’s economy return to growth.
Chancellor George Osborne tried to encourage growth with a Budget by delivering an hour-long statement packed with small-scale measures helping businesses.
Corporation tax, already gradually falling to 24%, will drop by two per cent rather than the previously scheduled one per cent from April 2011 to 26%, before falling to 23% by 2014.
“The combination of reduced corporation tax and planning liberalisation will help to lift business confidence at a difficult time” Institute of Directors director-general Miles Templeman said.
“However, the scale of deregulation in areas that really matter to business in general, such as employment law, is still very limited. And while the 21 new enterprise zones have real potential, we question why the whole of the UK can’t be an enterprise zone.”
The CBI was more welcoming, however. Director-general John Cridland said the Budget would help businesses grow and create jobs.
“The extra 1p cut in corporation tax will help firms increase investment,” he commented.
“Meanwhile, significant changes to entrepreneurs’ taxation will rightly focus much-needed support on businesses with growth potential.
“Reductions in regulations on businesses and the promise of a faster planning system will provide relief to companies trying to take on staff and invest.
“Support for manufacturers through the climate change agreements will help them manage energy costs.”
The latter was especially important, Mr Cridland added, because of a move to introduce a carbon price floor starting at £16 per tonne of carbon from April 2013.
Other measures to boost Britain’s growth include 11 new enterprise zones across England, with local areas to bid for a further ten.
The green investment bank will see its total available capital increase to £3 billion.
Tax avoidance will raise an extra £1 billion a year by shutting down schemes which disguise remuneration or dodge corporation tax, stamp duty land tax or VAT.
And all businesses employing fewer than ten people will be exempted from new domestic regulation over the next three years.
