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| Budget 2013: National Insurance payments cut | |
| (35 minutes later) | |
| Every company in the UK is to get the first £2,000 taken off their National Insurance (NI) bill in an attempt to boost job creation, the chancellor has announced. | Every company in the UK is to get the first £2,000 taken off their National Insurance (NI) bill in an attempt to boost job creation, the chancellor has announced. |
| Aimed at small firms, George Osborne said that when the change starts next April, "one third of all employers" will not have to make any NI payments. | Aimed at small firms, George Osborne said that when the change starts next April, "one third of all employers" will not have to make any NI payments. |
| He described it as "the largest tax cut in the Budget". | He described it as "the largest tax cut in the Budget". |
| NI payments go towards a number of benefits, including the state pension. | NI payments go towards a number of benefits, including the state pension. |
| The change is being called the Employment Allowance, which the chancellor described as "a tax off jobs". | The change is being called the Employment Allowance, which the chancellor described as "a tax off jobs". |
| "For the person who's set up their own business, and is thinking about taking on their first employee - a huge barrier will be removed," he added. | "For the person who's set up their own business, and is thinking about taking on their first employee - a huge barrier will be removed," he added. |
| "They can hire someone on £22,000, or four people on the minimum wage, and pay no jobs tax." | "They can hire someone on £22,000, or four people on the minimum wage, and pay no jobs tax." |
| The Federation of Small Businesses welcomed the announcement, saying the cut went "beyond what we were asking for". | The Federation of Small Businesses welcomed the announcement, saying the cut went "beyond what we were asking for". |
| "The chancellor has pulled out all the stops with a wide ranging package of measures to support small business," FSB national chairman John Walker said. | "The chancellor has pulled out all the stops with a wide ranging package of measures to support small business," FSB national chairman John Walker said. |
| The Employment Allowance will also apply to charities and community sports clubs. | |
| The chancellor also announced that he was reducing the amount of corporation tax that businesses have to pay from 21% to 20% from April 2015. The current main rate of corporation tax in the UK is 23%, which was already due to fall to 21% next year. | The chancellor also announced that he was reducing the amount of corporation tax that businesses have to pay from 21% to 20% from April 2015. The current main rate of corporation tax in the UK is 23%, which was already due to fall to 21% next year. |
| "Britain will have a 20% rate of corporation tax - the lowest business tax of any major economy in the world," said Mr Osborne. | "Britain will have a 20% rate of corporation tax - the lowest business tax of any major economy in the world," said Mr Osborne. |
| Bank lending | Bank lending |
| The chancellor also announced in his Budget speech that the Treasury is looking to extend the Funding for Lending initiative. | The chancellor also announced in his Budget speech that the Treasury is looking to extend the Funding for Lending initiative. |
| Mr Osborne said in his Budget speech that the government was speaking to the Bank of England about extending the scheme, which aims to increase bank lending to both firms and homes. | Mr Osborne said in his Budget speech that the government was speaking to the Bank of England about extending the scheme, which aims to increase bank lending to both firms and homes. |
| It is currently set to run from August 2012 to January 2014, with the target of lending roughly £60bn. | It is currently set to run from August 2012 to January 2014, with the target of lending roughly £60bn. |
| The chancellor also said he was moving ahead with launching a business bank. | The chancellor also said he was moving ahead with launching a business bank. |
| The planned business bank was first announced by Business Secretary Vince Cable last September. | The planned business bank was first announced by Business Secretary Vince Cable last September. |
| The chancellor said: "We are now actively considering with the Bank of England whether there are potential extensions to the successful Funding for Lending scheme that will boost lending still further. | The chancellor said: "We are now actively considering with the Bank of England whether there are potential extensions to the successful Funding for Lending scheme that will boost lending still further. |
| "And we are also setting out our plans for lending from our new Business Bank." | "And we are also setting out our plans for lending from our new Business Bank." |
| The Funding for Lending scheme is a joint initiative by the Treasury and Bank of England. | The Funding for Lending scheme is a joint initiative by the Treasury and Bank of England. |
| In simple terms, it means that the Bank of England lends money cheaply to commercial banks, so that the banks can then pass this on in the form of cheap loans to households and firms. | In simple terms, it means that the Bank of England lends money cheaply to commercial banks, so that the banks can then pass this on in the form of cheap loans to households and firms. |