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Budget 2012: Businesses will pay less tax

Date: 21 March 2012   |   Author: Rupert Saunders

The UK will become one of the cheapest countries in the developed world to do business, following cuts in the rate of tax on company profits announced in the Budget.

The main rate of corporation tax for larger companies (profits of more than £1.5m) will drop to 24% from this April and will fall further to 22% by 2014.

The Chancellor hinted at a long term target of 20% which would bring it into line with small business corporation tax and the standard rate of personal tax.

By 2014, the UK rate will be 18% lower than the current US rate and 16% lower than Japan, claimed the Chancellor. Significantly, it will also be 12% lower than France and 7% lower than Germany - assuming their rates don't change.

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