Chancellor George Osborne heralded a ‘Budget that encourages enterprise’ as he outlined the government’s plans for the next year.

Chancellor George Osborne heralded a ‘Budget that encourages enterprise’ as he outlined the government’s plans for the next year.

The biggest impact on M&A activity will come in the form of a 2 per cent reduction in corporation tax from April this year.

The move is part of a planned overall drop from its previous level of 28 per cent to 23 per cent in the next three years, and could free up cash to fuel growth and acquisitions.

Debbie Griffiths, entrepreneurial business partner at Deloitte comments: ‘The Chancellor’s decision to reduce corporation tax by 2 per cent is a step in the right direction for encouraging growth in the UK business community.’

However she adds: ‘Although this will be seen as a positive move for many companies, some smaller businesses are still struggling to make profits so it will depend on what sector they are in to truly see how much benefit they will actually see.’

Osborne outlined his rationale by stating that he was looking to boost enterprise and exports as part of a Budget ‘for making things’.

But he revealed that the bank levy will be adjusted to make sure the corporation tax cut does not directly benefit banks.

Osborne also stated that growth predictions for 2011 had been revised down from the previous level of 2.1 per cent to 1.7 per cent.