By Daniel Hunter

Chancellor George Osborne today (Wednesday) announced that corporation tax will be reduced to 20% by April 2015.

In doing so Mr Osborne sent out a clear message that Britain is very much open for business, and by 2015 will have the lowest corporation rate of any major business nation in the world.

“I would agree with the chancellor that the reduction in the main rate of corporation tax from 2015 will boost jobs and growth, certainly in the longer term," Tony Medcalf, tax partner at Moore and Smalley Chartered Accountants, said.

“What Mr Osborne has tried to do is give the message that Britain is open for business by also doing things like increasing the rate of R&D relief available to businesses, making it a more attractive place for international businesses to invest and innovate here.

“The chancellor has also dealt with one of the biggest burdens for small businesses by introducing the employment allowance to pay the first £2,000 of Employer National Insurance Contributions.

“However, we have to remember the economy remains in a bit of a mess. The Chancellor said the government is reducing borrowing, but all it is doing is reducing the rate of increase in borrowing, which is not the same thing.”

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