Companies declaring profits in the UK will pay one of the lowest tax rates in the developed world after, once again, the Chancellor cut the headline rate of corporation tax. It will now fall to 21% from April 2014, down from its current 24% and 23% from April 2013.

This compares with a rate of 40% in the US, 38% in Japan and 34% in France.

There is a clear strategy to bring the large company rate in line with that paid by smaller companies and individuals, which currently stands at 20%.

There was also a surprise increase in personal tax allowances with the starting threshold rising by an extra £235 from next April to £9,440 which will benefit all tax payers and take a significant proportion of people out of paying income tax altogether.

However, any increase in the threshold for higher rate tax payers has been capped at 1% which is less than the rate of inflation and means they will, effectively, be paying more in real terms.

The threshold increase has also been deferred and will be £41,865 in the 2014/15 tax year.

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