Budget 2011 - Putting "fuel in the tank of the economy"

The Chancellor of the Exchequer today handed down the 2011 Budget.  It contains a number of measures designed to support sustainable business growth and encourage investment in the UK.

Crucially, the Budget introduces a number of very positive and welcome changes that will appeal to a broad spectrum of taxpayers. 

The key highlights are:

• a reduction in the corporation tax rate to 26% with effect from 1 April 2011
• a strategy to consult on the integration of the national insurance contributions and income tax regimes
• twenty one enterprise zones to be established around the UK (and more to come).  Businesses operating in or which move into the zones will benefit from savings in business rates and other tax and commercial incentives
• the Bank Levy to be increased to effectively prevent the banks from benefitting from the reduced corporation tax rate
• the lifetime limit on gains qualifying for entrepreneurs' relief to be increased to £10 million from 6 April 2011
• the main fuel duty rate to be reduced by 1 penny per litre from today and future proposed increases to be deferred
• the introduction of a statutory residence test for individuals

In addition, there are changes to VAT, more anti avoidance rules, amendments to the enterprise investment scheme and venture capital trusts regimes amongst others.

A link to our Budget client bulletin can be found here.

A link to the HMRC 2011 Budget  pages can be found here.

We hosted a Budget webinar to discuss the key Budget outcomes on 25 March 2011.