2011 Budget summary

The Chancellor delivered a welcome plan for growth. He has taken some significant steps towards creating a tax system that is more supportive of business investment and growth. 

Alongside further clarification on matters that were already under discussion in existing consultations, the additional cut in the main rate of corporation tax will be an unexpected attraction; but the Chancellor’s effective tax increases in the banking and oil and gas sectors are less palatable. The expected reintroduction of enterprise zones and changes to investment incentives and entrepreneurs’ relief will be a boost to support new and growing businesses. It’s more difficult to see the incentives for elements of the other two overarching ambitions for growth in encouraging exports and creating a more educated and flexible workforce.

He also announced a number of bold and unexpected moves, including a radical new relief from inheritance tax on gifts to charities and a reduction, rather than the planned increase, in fuel duty. Similarly, although it has been widely trailed, the decision to consult on integrating the income tax and national insurance systems will be very welcome. However, this will have significant implications for all businesses which will need to be carefully thought through.

As well as the specific reliefs that will be abolished after the review by the Office of Tax Simplification (OTS), the Budget includes a wide-ranging review of existing and proposed legislation which will remove anomalies and reduce the impact of the tax system on business. This can only be welcomed.

2011 Budget summary sections:

Download the full 2011 Budget summary (165k PDF)