UK budget sees cuts in corporation tax and a freeze on petrol duty

Growth forecast cut as Government pushes to stimulate economy

The Chancellor George Osborne has unveiled this year’s budget for the UK, and halved growth predictions.

According to the BBC, although the economy is only predicted to grow by 0.6 per cent this year, the growth will mean that the UK avoids a triple dip recession.

To stimulate growth, corporation tax will be reduced from 21 per cent to 20 per cent, with the small company and main rates merged, and a planned rise in fuel duty rates has been canned.

Small firms will see a £2,000 allowance before having to make National insurance conributions and, elsewhere, beer duty will be cut by 1p on every pint and working parents will be able to claim back up to £1,200 worth of childcare expenses as a tax break.

“The budget contained a lot of good news for the IT industry, because it will stimulate demand for good IT services,” commented CompTIA’s UK director Graham Hunter.

“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.”

CompTIA applauded the measures designed to improve circumstances for British businesses.

“The thrust of the budget was about making the UK more competitive. There were good incentives for entrepreneurs,” continued Hunter.

“A more competitive tax rate should attract large companies to Britain in areas like pharma, creative industries, and high value manufacturing, and get them to start spending money. Shared equity loans and mortgage guarantee schemes should provide a boost to the construction industry, as should new infrastructure plans.

“These industries will form the future of British business and they are all areas that rely heavily on good IT infrastructure.”

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