Welcome to the 2011 Budget Newsletter from Connolly Accountants Ltd

Chancellor George Osborne has presented his Spring Budget to the House of Commons, which he heralded as a 'Budget for enduring growth and jobs'. Despite downgrading the economic growth forecast for 2011 from 2.1% to 1.7%, the Chancellor insisted that the Government's fiscal plans were on course.

The Chancellor's speech included a range of measures intended to boost business enterprise. Among the key announcements was an increase in the planned reduction in corporation tax, with rates falling by 2% from April 2011, and 1% in each of the following three years, to reach 23%, accompanied by an adjustment in the bank levy to ensure that banks do not pay less tax as a result.

The scrapping of business regulations to the tune of £350 million, and a three-year moratorium on new regulations for firms with fewer than 10 staff were also confirmed, and the business rate relief 'holiday' for small businesses will be extended for another year.

While a postponing of the planned rise in fuel duty had been anticipated, the Chancellor went a step further by cutting the duty by 1p a litre, and introducing a Fair Fuel Stabiliser, measures which will be paid for by additional taxes on North Sea oil firms. In addition to the planned increase in the income tax personal allowance, another future rise will take the allowance to £8,105, in April 2012.

Also of note for the future were plans to consult on a 'merger' of the income tax and national insurance regimes, proposals to review the impact of the 'temporary' 50% tax rate, and the long-term creation of a flat-rate state pension worth around £140 a week.

For a detailed overview of the Budget Report and what it means for you and your business, visit our Report summary by clicking here.


WHAT THEY SAID

'We have put fuel into the tank of the British economy'
Chancellor George Osborne

'It's the same old Tories. It's hurting but it isn't working. Every time he comes to this House his growth forecast is downgraded'
Ed Miliband, Labour leader

'This Budget will help businesses grow and create jobs. The Chancellor has made clear the UK is open for business'
John Cridland, director-general of the Confederation of British Industry

'While they will broadly welcome many of the Chancellor's announcements, British business owners will be looking for much more in the way of real actions in the weeks, months and years that lie ahead'
Phil Orford, chief executive of the Forum of Private Business

'The Government has committed to cutting red tape, but we believe new employment laws will still come into force this year, which could hinder businesses from taking on staff'
John Walker, national chairman of the Federation of Small Businesses


FOR THE FULL BUDGET ANNOUNCEMENTS VISIT:

http://www.hm-treasury.gov.uk/2011budget.htm


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