Mr Osborne said that Britain already had one of the most competitive tax regimes in the world and now he was publishing a “road map” to make business taxation fit for the future.
A number of changes were announced to business rates, following a review of the current system.
As of April 2017, around 600,000 small businesses will be taken out of business rates altogether, thus saving them in the region of £6,000 annually. A further 250,000 firms will benefit from a reduction in their current rates.
Plans were also announced to reform stamp duty for businesses. He said the changes to rates would mean “big tax cuts for small firms.”
As of midnight tonight, commercial stamp duty will have a zero rate band on purchases up to £150,000; a two per cent rate on the next £100,000; and a five per cent top rate above £250,000.
A further cut to corporation tax was also confirmed, with the rate set to be reduced to 17 per cent by 2020. “Britain is blazing a trail, let the rest of the world catch up,” said the Chancellor.
As had been speculated beforehand, the Chancellor confirmed an increase in Insurance Premium Tax – which will rise 0.5 per cent to 10 per cent. The move, which comes hard on the heels of an increase last autumn, is likely to be unpopular in sectors that will bear the brunt of the changes.
There was also bad news for the drinks industry, with a sugar tax to take effect in two years’ time. The levy is expected to raise £520million, although Mr Osborne said it would be down to manufacturers whether to pass on the price to consumers. Pure fruit juices and milk-based drinks, as well as small producers, will not be affected by the levy.
Outlining plans for further devolution, Mr Osborne said that a new city deal had been agreed with the Cardiff region. Elsewhere the Greater London Authority would move towards the full retention of business rates from next April.
Following recommendations from the Low Pay Commission, the Government will increase the National Minimum Wage rates from October 2016.
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