Creating a "competitive" tax system was the central pillar of chancellor George Osborne's budget, with measures to ease the tax burden on SMBs and make it harder for businesses and individuals to evade tax.
Osborne claimed that under the coalition's stewardship, Britain has risen from having one of the least competitive business tax environments to having the most competitive system in the world. The rate of corporation tax, which was scheduled to drop to 21 per cent in 2016, will now be lowered further to 20 per cent.
This rate will also be standardised for businesses of all sizes, and the chancellor claimed he would pay for the tax cut by increasing the bank levy rate to 0.142 per cent. And, in what he characterised as "the biggest tax cut in the Budget", Osborne also introduced the "Employment Allowance", which wipes out the first £2,000 of employer National Insurance contributions.
He claimed the measure would see 450,000 small businesses, representing one third of this country's employers, having to pay no contributions at all.
"I want to support jobs and the small businesses that create them," said Osborne. "The cost of employing people is a massive burden on small firms."
The AIM of the game
Osborne also plans to make it easier for small and mid-sized firms to raise money through the Alternative Investment Market by abolishing stamp duty on all transactions.
"It has long been biased towards debt financing," he added.
Meanwhile, agreements have been reached with the Isle of Man, Guernsey and Jersey which will see £1bn of unpaid tax recouped. Rules are also to be introduced to try to curb instances of tax evasion, including "naming and shaming" finance professionals who help people take advantage of such schemes.
"This government is not going to let you get away with it," he warned.
Elsewhere in the Budget, Osborne promised to ensure government procurement chiefs do not needlessly spend their budget. Under his watch, central government departments will "underspend their budgets by more than £11bn this year", he claimed.
"The traditional flush of cash by departments at the end of the fiscal year just to get the money spent has to be curtailed," added Osborne.
Despite this, the chancellor revealed that the planned slowdown in government capital spending from 2015/16 onwards will now not be implemented. Under his revised plans, the government will now increase spending by £3bn a year in each of the five years from 2015 onwards.
"We are building the most competitive tax system in the world so we can provide the economy with the infrastructure it needs," he said. "We will be giving Britain the fastest broadband and mobile telephony in Europe."
The GDP growth forecast for this year has been revised down to 0.6 per cent, with a 1.8 per cent increase projected for next year. In 2015, 2016 and 2017 this is expected to rise to 2.3, 2.7 and 2.8 per cent respectively.
"[Recovery] is taking longer than anyone hoped, but we must hold to the right track," said Osborne (pictured). "Our nation is in a global race... for investment and jobs that could go anywhere.
"When we started the unavoidable task of cutting the public sector workforce, some doubted that the private sector could pick up the slack. Their lack of confidence was misplaced. For every one job lost in the public sector [in the past three years], six have been created in the private sector."
In his response, opposition leader Ed Miliband slammed Osborne for having to revise down the country's growth prospects yet again. He also claimed some of the business-friendly measures introduced in previous Budgets – such as the National Loan Guarantee Scheme and the Funding for Lending scheme – have been damp squibs.
"[Under Tory tax plans] John the banker earning £1m a year will get a tax cut of £42,500 – double the average wage. His friend – let's call him George – earning £5m a year, will get a tax cut of nearly £250,000. At the same time everybody else is paying the price. Millions are paying more so that millionaires are paying less."
Graham Hunter, UK director of trade association CompTIA, told channel firms not to be too disheartened by the prospect of further cuts in capital spending from government departments.
"The Budget was never going to be cheery, and further cuts to most government departments sounds like it will make it harder for the many IT companies that rely on government contracts," he said.
"But actually the Budget contained a lot of good news for the IT industry, because it will stimulate demand for good IT services. For government departments with tighter budgets, IT companies have a greater opportunity to explain how IT can make things more efficient, cutting costs without shedding jobs."
Automation firms UiPath and Automation Anywhere close out their funding rounds with $265m and $300m respectively
View photos of last night's awards ceremony in London
View photos of all the winners from the 2018 Channel Awards
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