2012 Budget: The business reaction
21 Mar 2012
Business groups have given mixed initial reactions to Chancellor George Osborne’s 2012 Budget statement.
Responding to the news that the headline rate of corporation tax will fall by 2% to 24% next month, Simon Walker, Director General of the Institute of Directors, commented, ‘While any tax reduction is welcome, the Chancellor has not done enough to free business from the burdens and barriers that are holding economic growth back’.
The Confederation of British Industry (CBI) gave a cautious welcome to the announcements, arguing that the additional 1% cut in corporation tax ‘could make a big difference to investment intentions’.
However, CBI Director General John Cridland added that businesses would be disappointed at the lack of announcements relating to deregulation, stating that ‘for smaller businesses, things may not feel very different on the ground’.
Small business groups echoed the CBI’s concerns, with the Federation of Small Businesses welcoming the Government’s plans to simplify the tax system for the UK’s smallest firms, but expressing disappointment over the Government’s lack of action in some areas, such as reducing fuel duty to help ease the pressure on small businesses.
The British Chambers of Commerce also suggested that the Government ‘could have done more’ to help UK businesses, arguing that despite the announced reduction in corporation tax, businesses will still face a 5.6% rise in business rates from April.