By Martin Lambert, Head of Corporate and International Tax, Grant Thornton UK LLP

The Chancellor's 2013 Budget focused on the need to bring business to our shores with competitive taxes and, as expected, there were a number of announcements to further encourage business investment in the UK.

In the Autumn Statement, the Chancellor reiterated the Government's intention to work with the Organisation for Economic Co-operation & Development (OECD) to ensure that the UK has a fair tax regulatory system and provides a stable compliance platform for multinationals operating in the UK.

With a focus on a fair tax system, the Chancellor announced measures to close loop-holes around a number of areas of legislation including corporation tax losses.

The Chancellor's budget was eagerly awaited by UK businesses to see how George Osborne would stimulate growth in a sluggish economy. As many had expected, the Chancellor announced a further reduction in the main stream corporate tax rate to 20% from 1 April 2015, thereby marrying both the large and small company rates and eliminating marginal relief. It is positive to see that this rate reduction has not been eroded by claw-backs elsewhere.

Further good news for big business was the announcement that the Above the Line Research and Development Tax Credit will be introduced at a rate of 10%, an increase of almost 10% from the previously announced rate of 9.1%. This should encourage more global businesses to locate their R&D operations in the UK.

The Chancellor also announced a series of well targeted measures to encourage employment growth for UK SMEs including the introduction of an Employment Allowance of £2,000 towards employer National Insurance contributions.

In addition, the Chancellor announced the introduction of reliefs and exemptions in respect of employer shareholders. This, coupled with the relaxation of the Seed Enterprise Investment Scheme (SEIS) rules, can only encourage further investment in entrepreneurial businesses.

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