Chancellor George Osborne promises business tax reform

UK Chancellor of the Exchequer George Osborne has told the CBI's annual dinner that the government is committed to lower and simpler corporate tax rates.

He said that in next month's Budget he wanted to set out a "five year road for a big reform of corporation tax".

As well as lower rates and a simpler system, he wanted to change rules which he said had "driven business overseas".

He also said the personal income tax allowance would rise in the Budget.

Referring to reform of the Controlled Foreign Companies rules, he said the aim was to encourage multinational firms to come to the UK, not leave it.

"We will reform the corporate tax system by simplifying reliefs and allowances, and tackling avoidance, in order to reduce headline rates," said Mr Osborne.

"Our aim is to create the most competitive corporate tax regime in the G20, while protecting manufacturing industries".

And for would-be entrepreneurs, he wanted the UK to be the easiest place in the world to start a business.

He added: "And I want to help new businesses by abolishing employers national insurance contributions on the first ten jobs they create."

With reference to personal income tax allowances, he said the long-term goal was to raise the allowance to £10,000, "with real terms steps in that direction every year".

Meanwhile at the same CBI dinner, Helen Alexander, president of the the business group, said public services should be "re-engineered" to help tackle the huge deficit.

She also said the CBI did not want any more business taxes, warning they would hit jobs, enterprise and growth.

The CBI's priorities were, she added, "a sustainable path back to fiscal health, a tax system that looks for growth and doesn't hit business, the right infrastructure and reform of our public services and public sector pensions"