The Chancellor re-affirmed the Government's fiscal policy, with the intent of eliminating the structural deficit by 2014. The borrowing figure for 2011-12 is slightly better than originally forecast – at £126 billion – but the fiscal framework means that the Budget measures are broadly neutral, with tax cuts balanced by tax rises.
The key message for business is that the Government is focussed on creating the best tax regime in the G20. It wants to encourage more business in the UK and the latest instalment is a further 1% cut in corporation tax from 1 April 2012, moving down to 22% from 2014. The Controlled Foreign Company and Patent Box regimes will start in 2013, as planned, and there will be consultation in the summer on the 'above the line' R&D tax credit regime, with repayable credits for loss-makers.
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