A cut in fuel duty, a reduction in the rate of Corporation Tax and plans to merge income tax and National Insurance contributions were the highlights of the 2011 Budget. George Osborne’s Budget was designed to kick-start the struggling UK economy by encouraging enterprise and providing support to British business.
Few changes to personal tax
Whilst the Budget aimed to provide support to the British economy, there were precious few
changes to affect the average British family. The personal allowance – the amount of money
that can be earned without paying tax – will again rise in 2012 from £7,475 to £8,130. And, the
Chancellor announced a consultation on merging income tax and National Insurance contributions to
simplify the tax system.
In a surprise move, the Chancellor also reduced fuel duty by 1p per litre. This is to be funded by
increasing the supplementary charge on North Sea oil and gas production from 20 per cent to 32 per
cent. A plan to increase Air Passenger Duty was also postponed.
Supporting British business
In an attempt to boost the UK economy – which is set to grow at a lower rate than the Government
originally predicted – the Chancellor announced a series of measures. £350 million of regulation on
businesses is to be removed and Corporation Tax will fall by 2 per cent, making it the lowest level of
business tax in any G7 country.
Osborne also announced £200 million to improve regional railways and £100 million to help local
councils repair potholes.
The Chancellor said that the Budget was ‘about reforming the nation’s economy, so that we have
enduring growth and jobs in the future. And it’s about doing what we can to help families with the
cost of living and the high oil price.’
