Budget 2011: view from the ICAEW Tax Faculty

The 2011 Budget was an important test of the coalition government and the Chancellor. Faced with a range of conflicting economic data sluggish growth forecasts and rising inflation and fuel prices not to mention the need to tackle the largest budget deficit in the UK’s history the Chancellor’s options were limited.

The Chancellor’s strategy was pretty clear: to help raise the level of UK growth and rebalance the economy away from government spending and the financial sector towards manufacturing and exports by reducing business taxes and red tape increasing investment incentives reforming the planning system some enhanced tax reliefs and tax simplification.

The 2% reduction in the main rate of corporation tax from 1 April 2011 sent out a strong message that the UK intends to be competitive on business...