Corporation tax drop will signal Britain is "open for business"

Changes to National Insurance and corporation tax rules unveiled by Chancellor George Osborne in today's Budget will signal Britain is "open for business".

"The business community wants certainty and stability," explained Osborne. "Corporation tax rates act as adverts for the countries that have introduced them. Our current rate of 28p is looking less competitive."

He pledged to cur the rate by 1p a year from next year down to a rate of 24%.

"We want a sign to go up over the British economy that says open for business. 24% will be the lowest rate of any western economy," added Osborne.

In addition, Osborne committed to lowering the cost to businesses of hiring those earning less than £20,000 a year.

Speaking in the House of Commons, flanked by Liberal Democrat leader Nick Clegg and Treasury chief secretary Danny Alexander, Osborne also announced that VAT will rise to 20% from 4 January next year.

Smyle managing director Rick Stainton told C&IT that VAT rises would "affect everything".

Creative Direction & Motivation director Chris McQue said it was a time of "great uncertainty". "We are not even into the first part of the match yet," he warned.