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March 29, 2011 04:14 ET

The Budget and Business at a Glance

LANCASTER, UNITED KINGDOM--(Marketwire - March 29, 2011) - The Chancellor promised a budget for growth. That means business growth. Small businesses up and down the country will now be mulling over the changes George Osborne introduced on March 23.

The question is: did he deliver for business?

John Walker, National Chairman, Federation of Small Businesses, thinks he did, but also that he should have gone much further.

"The Chancellor has said that this Budget would be a 'Budget for Growth' and in part that is what we have – however, there are vital components missing for small firms to create jobs.

"We are pleased that the Chancellor has introduced a fuel duty stabiliser, has committed to cutting fuel duty and has introduced 21 new Enterprise Zones. This will provide much needed stability for struggling small businesses.

"The Government has committed to cutting red tape, but we believe new employment laws will still come into force in this year, which could hinder businesses from taking on staff. The biggest opportunity missing from this Budget is by not extending the National Insurance Contributions holiday nationwide to existing businesses, which would really have provided incentives for small firms to take on more staff."

Here's a guide to the key changes that will affect businesses, both directly and indirectly:
  • Corporation tax to be cut by two per cent in April, not the one per cent as previously planned. And it will be cut by one per cent in each of the next three years, reducing it to 23 per cent.

  • The SME rate of corporation tax, for companies with profits under £300,000, will fall to 20 per cent from 1 April 2011, as previously announced.

  • The taxable turnover threshold for VAT registration will rise from £70,000 to £73,000; and the taxable turnover threshold that determines whether deregistration can be applied for will rise from £68,000 to £71,000.

  • Fuel duty to be cut by 1p per litre.

  • Road tax duty for HGVs is frozen.

  • Planned inflation fuel duty rise in April is shelved until 2012.

  • The yearly 1p plus inflation rise in fuel – the so-called 'fuel escalator' - is abandoned until 2015.

  • Research and development tax credits for SMEs go up to 200 per cent next month, and to 225 per cent in 2012.

  • No new regulation on firms with fewer than 10 staff for three years – so-called micro businesses.

  • The business rate relief holiday for small firms is extended for another year. This applies to business premises with a rateable value below £6,000.

  • Council taxes will be frozen or cut this year in every council in England.

  • Entrepreneurs' Relief for those selling a business is doubled to £10 million.

  • The rate of tax relief available under the Enterprise Investment Scheme (EIS) goes up from 20 per cent to 30 per cent.

  • 21 Enterprise Zones to be created in England, backed by tax incentives.

  • An extra 40,000 apprenticeships to be created.

  • Funding for 100,000 new work experience placements.

  • Alcohol duty rates to stay the same.

  • Cigarettes and tobacco duty rates go up by two per cent plus inflation.

  • Personal tax allowance increased by £630 to £8,105 from April 2012.

  • A long-term examination of the possibility of simplifying the tax system by merging national insurance and general taxation.

  • Direct taxes will be linked to the Consumer Price Index from 2012.

Premierline Direct is part of the Global Allianz Group and provides cover to a wide range of industries from shops and offices to hotels and manufacturing, tailoring its insurance packages to meet the diverse needs of each business.

For more information on the details of the March 2011 budget visit the HMRC website

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