Corporation tax cut to 24% in April

The Chancellor announced an immediate 1% cut in corporation tax after saying he wanted to make the UK's tax system more competitive for business than in any major economy across the world.

George Osborne told the Commons that the headline rate of corporate tax was the most visible sign of how competitive the UK was.

"We've already cut the rate from 28% to 26%. This April it is due to fall again to 25%. I can announce today a further cut of 1% - to be implemented right away.

"From next month, Britain will have a corporation tax rate of just 24%, and we will continue with the two further cuts planned next year and the year after.

"So that by 2014, Britain will have a 22% rate of corporation tax. The biggest sustained reduction in business tax rates for a generation.

"A headline rate that is not just lower than our competitors, but dramatically lower - 18% lower than the US, 16% lower than Japan, 12% below France and 8% below Germany.

"An advertisement for investment and jobs in Britain, and a rate that puts our country within sight of a 20% rate of business tax that would align basic rate income tax, the small companies rate and the corporation tax rate."

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.

Business groups have been pressing the Government to use today's Budget to speed up help for firms so they can create jobs to offset losses in the public sector.

The Government said it will introduce a programme of enterprise loans for 18 to 24-year-olds who want to open their own business, starting with a one-year pilot programme.

A "small amount" of money will be offered, averaging £2,000-£3,000, as well as training and mentoring support, and the scheme will be evaluated in a year's time.

The Business Department said tens of thousands of young people could be helped every year when the scheme is fully operational.

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PA