Corporation tax to be cut to 23 per cent by 2014

The announcements made in the budget speech by George Osborne on Wednesday have caused many to call it a 'Budget for businesses', with the business body CBI themselves saying it would help business grow and create jobs. The somewhat surprise announcement that corporation tax would be cut by 2% in April this year, as opposed to the much anticipated 1%, was just part of the measures aimed at improving conditions for business and investment in the UK.

As well as the 2% cut in the rate of corporation tax from April, bringing it to 26%, the Chancellor confirmed that it is to fall by 1% for the next three years, so that it reaches the end target of 23%. Mr Osborne spoke of his intention to create a Budget "for making things", and how he hoped to boost enterprise and exports, as well as making the UK more attractive to foreign investors.

Meanwhile, Northern Ireland saw the publication of a consultation paper analysing the argument to lower corporation tax rates in NI to a level on a par with its southern neighbour the Republic of Ireland. Even with the proposed reduction in the UK rate in April and over the next 3 years, the Irish Republic comes in much lower with its much famed low tax rate of 12.5%.

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