Small Business News | Budget – Corporate Tax Cut

Chancellor George Osborne finally announced plans to help the recovery of the UK at lunchtime today. Top of the bill was an increase in VAT. He commented the tough measures announced were “unavoidable” because of the country’s debts.

Aside from the bad news about VAT, there was some good news for business and small business in particular. The chancellor wants to slash corporation tax as part of a move to show companies around the world that Britain is “open for business”. Corporation tax will be cut from 28% to 27% next year, and by 1% annually for the following three years. The rate for small companies will also be cut from 21% to 20%.

In addition, guarantee schemes for small business financing will be extended.

We’ve pulled together a brief summary of the Chancellor’s new measures:
1. VAT to rise from 17.5% to 20% from 4 January next year
2. Income tax allowance to rise by £1,000
3. No rise in alcohol, tobacco or fuel duties
4. Link between basic state pension and earnings to be restored
5. Capital gains tax for higher rate tax payers to rise to 28%
6. Two-year pay freeze for public sector workers earning more than £21,000
7. Levy imposed on banks
8. Corporation tax to be cut from 28% to 24%
9. 25% budget cuts across all government departments (education and defense are protected)
10. Public sector pay frozen for two years, those earning less than £21,000 will be protected

The BBC has details of the full outcome of the budget on its website.


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