The action the government has taken to support business and grow the economy will be worth £11 billion in the financial year 2014 to 2015.
This includes action to cut employment costs, business rates and fuel costs, as well as considerable reductions in the main rate of corporation tax.
- cutting corporation tax from 23% to 21%. It has fallen from 28% in 2010 and will fall further to 20% in April 2015
- doubling the Annual Investment Allowance – tax relief for investment in plant and machinery – to £500,000, and extending by a further year to December 2015, meaning 99.8% of businesses will pay no tax on capital investment
- reducing the burden of business rates so that the annual increase is capped at two per cent; the small business rates relief is extended for a further year, so that over half a million of the smallest businesses pay reduced rates and over a third of a million pay no rates at all; and targeting help for the high street provided in the form of a £1,000 discount for retail properties, benefitting around 300,000 shops, pubs and restaurants
- freezing fuel duty so that it will be 20p per litre less than under inherited plans
- the employment allowance comes into effect, representing an up to £2,000 cut in employer National Insurance Contributions; this will benefit over one and a quarter million employers, over 90% of them small businesses. 400,000 small businesses will no longer pay employer National Insurance at all
Discussing the business tax reforms Chancellor of the Exchequer, George Osborne, said:
The government is backing business, which is vital for the UK economy to grow and create jobs. The tax changes taking effect today will reduce the cost of employment, ease the tax burden on businesses and stimulate investment.
Since 2010, we have cut all major business taxes and the reforms we are delivering are already having a positive impact on the UK’s competitiveness.