George Osborne has delivered his second budget speech aimed at achieving strong, sustainable and balanced growth. The budget was intended to be fiscally neutral and not a "tax raising" budget but as always some will benefit greater than others and the detail as with recent years tends to be hidden away in the press releases. However, the main points were:
- Reduce the main rate of corporation tax by a further 1%. From April 2011, the rate will be reduced to 26% and, by 2014, it will be reduced to 23%
- Simplify the tax system, responding to the work of the Office of Tax Simplification (OTS) by abolishing 43 tax reliefs
- Consult this year on the options for integrating the operation of income tax and National Insurance Contributions (NICs)
- Reform the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) including raising the rate of EIS income tax relief to 30% from April 2011
- Increase the SME rate of R&D tax credit to 200% from April 2011 and 225% from April 2012
- Doubling the lifetime limit for capital Entrepreneurs Relief to £10 million
- Invest £100 million in science capital development
- Extend the limit for capital allowances short life assets election from 4 years to 8 years
- Establish 21 new enterprise zones
- Reform the stamp duty land tax rules
- Reform the taxation of non domiciles, including an increase in the annual charge for non domiciled individuals who have been in the UK for more than 12 years
- Reduce the rate of inheritance tax to 36% from April 2012 for estates leaving 10% or more to charity. Charities will also be allowed to claim new gift aid on up to £5,000 of small donations per year
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