Food and Drink Federation director general Melanie Leech commented: “We are relieved that the chancellor has confirmed that most foods will continue to be zero-rated. We had argued against ending existing zero ratings as such a move would disproportionately impact the poorest in society, dampen consumer spending and fuel inflation”
Corporation tax will be cut to 24% from of 28% by 2014, giving the UK the lowest level of corporation tax among major western economies.
Other measures include any new businesses outside London and the south east receiving relief from the first £5,000 of national insurance for the first 10 employees, Capital gains tax for higher rate taxpayers rising from 18% to 28% with a £10,100 annual exemption staying, and lower income investors paying 18% on capital gains beyond this as previously.
Further, the first £5m of lifetime gains will be taxed at 10%, increased from £2m.
The government will also raise the threshold of employer national insurance by £21 a week to avoid the majority of Labour’s increases in national insurance.
Investment allowances for plant and machinery will be cut from 20% to 18% For longer term investments the allowance will be cut from 10 per cent to 8%
According to Stephen Rossides, director of the British Meat Processors Association: “the emphasis is on lower spending rather than higher taxes. There are some useful measures for business.”