Budget 2011: Corporation tax cut by 2% from next month

The Chancellor George Osborne has said that it is determined to support the private sector and has announced plans to cut and simplify taxes and is looking to merge income tax and national insurance to reduce costs for firms. Corporation tax, which was due to be cut by 1% from next month is now goin

The Chancellor George Osborne has said that it is determined to support the private sector and has announced plans to cut and simplify taxes and is looking to merge income tax and national insurance to reduce costs for firms.

Corporation tax, which was due to be cut by 1% from next month is now going to have 2% shaved off, with 1% reductions over the next subsequent years.

"Britain used to have the third lowest corpration tax rate in Europe now has the sixth highest," said Osborne.

In his Budget the Chancellor said it had reviewed the tax system and as a result had abolished 43 tax measures and would look to merge the two main forms of taxation companies had to wrestle with to make it easier for them to manage the system.

"It is time we simplify dramatically our tax system and make it fit for the modern age," said Osborne who added that Britain was not attractive to overseas firms but through lower and simpler tax systems would regain its competitiveness.

The Chancellor has also made moves to increase the support for start-ups, doubling entrepeneur relief, and mentioned Project Merlin as a sign that it was doing more to ease the access to finance for SMEs.

There is also going to be a three year moraturium on regulation that could impact small businesses.

"Small businesses are the innocent victims of the credit crunch," he said.

Small businesses were also acknowledged as being victims of fuel price rises after the steep rises in petrol costs hit them, as well as households, hard in the last few months.

Under the previous government's fuel duty escalator a  rise was meant to be introduced next week but charges on gas and oil production have been increased to raise revenue to delay inflation sparked rises until next year.

The fuel duty escalator that adds 1p on top of inflation each year has been scrapped and in addition fuel has been cut by 1p a litre from 6pm tonight

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