The Chancellor has reduced corporation tax and announced measures to help employers hire more staff in today’s Budget.
From April 2015 corporation tax will be reduced by one percentage point to 20%, making it the “lowest business tax of any major economy in the world,” George Osborne said.
He also announced plans to cut the first £2,000 from employers’ National Insurance contributions under a new Employment Allowance.
“It will mean that 450,000 small businesses – one-third of all employers in the country - will pay no jobs tax at all,” Osborne said.
“For the person who’s set up their own business, and is thinking about taking on their first employee – a huge barrier will be removed.”
Elsewhere, September’s fuel duty increase has been cancelled, and beer duty has been cut by 1p per pint.
Association of Convenience Stores (ACS) chief executive James Lowman welcomed these measures, but rued the Chancellor’s failure to act on business rates and the high street.
“We welcome the Employment Allowance which will help local shops to take on more employees, and the decision to freeze beer duty will benefit consumers and reduce some of the pressure on local shops losing trade to the illegal market,” he said.
“It’s a shame this benefit will not be shared by customers buying wine, spirits and cider.”
Lowman also welcomed the introduction of faster payments for card transactions, which would keep “more stores open and able to invest in their business and their community”.
However, he added: “The Budget does not include any radical changes that will transform confidence amongst everyday entrepreneurs.”