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How will the Budget affect your business?

The Chancellor of the Exchequer, George Osborne, presented the 2011 Budget on 23 March.

The Budget builds on announcements in the Spending Review 2010 and the June Budget 2010 which can be found at HM Treasury website - Opens in a new window along with all the detailed announcements.

The Budget sets out a package of measures with the key themes of Growth andFairness.

The Budget also launches the Government's Plan for Growth - Opens in a new window, a package of measures aimed at supporting private sector investment, enterprise and innovation. This includes measures to increase the competitiveness of the UK tax system; reduce the burden of regulation; and increase incentives for business investment.

Key measures in the Budget for businesses include:

From 6pm on 23 March 2011

Fuel Duty

Fuel Duty will be cut by 1p per litre.

Tobacco Duty changes

Tobacco duty rates will rise by 2% above inflation, and the duty regime will be reformed in due course.

From April 2011

Corporation Tax reduction

The main rate of Corporation Tax will be reduced to 26% from April 2011, with further yearly reductions of 1% until it reaches 23% in 2014. See our guidance on Corporation Tax rates.

Domestic Regulations

A moratorium exempting micro businesses and start-ups from new domestic regulation will be introduced for three years from 1st April.

R&D Relief

Subject to State Aid approval, the Small & Medium Enterprise Scheme Relief will increase to 200% from April 2011 and 225% from April 2012.

Reform of Enterprise Investment Scheme (EIS)

The Enterprise Investment Scheme and Venture Capital Trusts will be reformed. This will include raising the rate of EIS Income Tax relief to 30% from April 2011 subject to State Aid approval.

Vehicle Excise Duty (VED) rates

VED will increase by RPI indexation only in 2011-12. Rates for Heavy Goods Vehicles will be frozen.

National Insurance rate rise

As previously announced, the National Insurance rate rise will go ahead.

Longer term

Controlled Foreign Company rules

New rules will allow groups based in the UK to compete more effectively with those based overseas.

Simplification of the tax system

43 outdated Tax Reliefs will be abolished.

Merger of Income Tax and NI

The Government will consult on options for integrating the operation of Income Tax and National Insurance Contributions.

Changes to Health and Safety regulations

The recommendations of Lord Young's review of H&S regulations will be implemented.

Changes to the planning process

The planning application system will be streamlined and a new fast-track process will be introduced for major infrastructure.

Entrepreneur's Relief

The lifetime limit for Entrepreneur's Relief will be doubled to £10 million.

Enterprise Zones

21 new Enterprise Zones will be established, promoting growth.

Work experience and apprenticeships

An additional 80,000 work experience places for young people and an additional 50,000 apprenticeship places will be created within the next four years.

Personal Allowances

The Personal allowance for income tax for under 65s will be increased to £8,105 from April 2012.

Fuel duty

Inflation only increases in Fuel Duty will be deferred until 1st January 2012. The April 2012 increase will be implemented on 1st August 2012.

Small Business Rate Relief

The Small Business Rate relief holiday will be extended by one year effective from 1st October 2011.

Encouraging the Housing Market

The Government will work with house builders to assist over 10,000 first time buyers to purchase new build property.

For further information and the full Budget report you can visit the HM Treasury website - Opens in a new window and HMRC website - Opens in a new window. The Government has published a single supplementary document containing further details on all tax changes announced at Budget - Opens in a new window.

Information may be different in Scotland, Wales and Northern Ireland.

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