Budget 2012: Chancellor speeds up corporation tax cut but Norfolk business boss fears measures will do little to help the region
Chancellor George Osborne set out a 20-20 vision for Britain's businesses as he brought forward plans to cut corporation tax to 24pc and said Britain was in sight of a 20pc rate.
Mr Osborne told the Commons that the headline rate of corporate tax was the most visible sign of how competitive the UK was and said by 2014 Britain would have a 22pc rate and he raised the bank levy to 0.105pc from next January to fund the �2.5bn corporation tax cut.
The chancellor also announced a doubling of grants to help new start-up businesses recruit and retain staff, saying the tax reductions were aimed at winning business. But there was no announcement to pare back next month's 5.6pc rise in business rates, which is sure to disappoint many firms particularly retailers.
'From next month, Britain will have a corporation tax rate of just 24pc, and we will continue with the two further cuts planned next year and the year after,' mr Osborne said. 'So that by 2014, Britain will have a 22pc rate of corporation tax. The biggest sustained reduction in business tax rates for a generation.'
Caroline Williams, chief executive of Norfolk Chamber of Commerce said: 'The Chancellor's commitments to contain the deficit and reduce corporation tax will be welcomed warmly by business. However, many small- and medium-sized companies will feel the measures overwhelmingly benefit the biggest businesses. Smaller firms will be disappointed George Osborne did not do more to support confidence and growth in the real economy.
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'While there is a 1pc cut in corporation tax, companies will still be hit with a 5.6pc rise in business rates from April. In addition, businesses face lower allowances for investment in new plant and machinery in most areas, and will see no further incentives to create employment, particularly for young people. And while the chancellor has reduced the cost of borrowing for some businesses, the problem of accessing finance in the first place remains, and will become more acute as the economy begins to grow.
Guy Gowing, managing partner at Arnolds, said: 'We were disappointed that there was no re-think in the rise in business rates, which for this year is linked to last September's exceptionally high inflation rate, following a big increase the year before. I would like to have seen him recognise that this is a big burden on businesses, and a concession here would have helped accelerate growth in what is only a mildly improving economy.
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'I was also disappointed that he did not reinstate the empty rates relief for commercial premises, the absence of which is having a disproportionate effect on investors in retail property in our towns and cities.'
Steve Jaggard, founder of Further, an online marketing agency welcomed the corporation tax cut but said the budget did little for businesses in the East.
'It's clear that the UK economy needs a real boost: youth unemployment needs addressing, the tax system needs simplifying and creative and digital industries like ours need support. Unfortunately what Mr Osborne delivered was a budget which does little for business.
'I applaud the chancellor for reducing the level of corporation tax to 24pc from April and reducing it to 22pc by 2014. However, I don't believe that this cut goes far enough or indeed fast enough – businesses need help today, not tomorrow or next year.
'Our tax system is by far and away one of the most complicated in the world and continues to grow in complexity as each year passes. The tax simplification measures outlined today are unfortunately not the 'root and branch' reform of the tax system that businesses are crying out for.'