A 2% cut in corporation tax, 1p per litre cut in fuel tax and a £250m new shared equity scheme to help first-time buyers on the property ladder were unveiled in today’s Budget.
Plans to simplify tax to reduce bureaucracy on business, including consultation to merge national insurance and income tax, were also set out in what chancellor George Osborne called the “plan for future growth”.
He said his corporation tax measures, which included a further 1% cut in the next three years, would give the UK the lowest corporation tax in the G7.
He also acknowledged the hardship to businesses and families of high fuel prices, which have added an extra £10 to filling the average family car.
He cancelled the fuel duty escalator charge, cut fuel duty by 1p per litre and introduced a fair fuel stabiliser which will be funded by increasing the supplementary charge on North Sea oil production from 20% to 32% when oil prices are high.
This will allow fuel duty to be increased by only the rate of inflation when oil prices are high.
In addition, the 2011-12 inflation-only fuel duty increase will be deferred to January 2012. Meanwhile, vehicle tax rates are being frozen for hauliers.
To help construction, Mr Osborne unveiled a £250m new FirstBuy shared equity scheme to help 10,000 first-time buyers on the property ladder, while planning will be reformed to prioritise growth and jobs, with a new presumption in favour of development.
The government will also increase income tax relief on the enterprise investment scheme from 20% to 30% and increase the size of companies that can qualify. And it will target a 15% increase in bank lending to small businesses.
A three-year moratorium on new domestic regulation for small businesses is being introduced and the small business rate relief holiday is being extended for a further year to October 2012 at a cost of £370m.
From April, the small companies R&D tax credit will rise to 200%, increasing to 225% next year, while businesses are being encouraged to invest in machinery by a doubling of the limit on capital allowances for short life assets from four to eight years.
“We want to make Britain the best place in Europe to start, grow and finance a business,” said the chancellor.
“We want the words ‘made in Britain’, ‘created in Britain’ ‘designed in Britain’, ‘invented in Britain’ to drive our way forward,” said the chancellor.
