There was some good news for businesses. Companies will benefit from an immediate further cut in the rate of corporation tax to 24% from April this year with additional 1% cuts in each of the subsequent two years bringing the rate down to 22% from April 2014. This is a positive, pro-business measure which is very welcome, especially as the Chancellor hinted at a possible future alignment of corporation tax rates with the 20% basic income tax rate.

There is to be an increase in the value of equity participation that small and medium Enterprises (SMEs) can offer to key employees under the Enterprise Management Incentive (EMI) scheme. This scheme has been used very successfully to recruit and retain key employees by allowing them the opportunity to invest in their employing company in a highly tax efficient manner. Currently, options over shares to the value of £120,000 can be granted to a key employee but this value limit will be increased to £250,000 as soon as possible, subject to State aid approval.

Companies located in designated areas within Enterprise Zones will from 1st April 2012 be entitled to claim 100% capital allowances on new (not replacement) plant and machinery. This measure should stimulate investment in the three Scottish Enterprise Zones in Irvine, Nigg and Dundee.

Small unincorporated businesses with turnover of less than £77,000 (the threshold for VAT registration) will, from April next year, be able to compute their tax profits using a cash basis rather than the current earnings basis. This will make it easier for affected businesses to calculate their taxable profits and may also improve cash flow by allowing tax on unbilled work to be deferred.