Tax relief for games industry scrapped, landline tax binned

The coalition UK chancellor of the exchequer said today in his first budget that he’s scrapping the so-called landline tax to finance fast broadband and will push instead for private investment to promote digital Britain.

George Osborne also said that proposed tax relief for the video games industry will be abandoned – a measure promised by the last Labour administration.

As expected, VAT will rise to 20 percent, but that’s not going to happen until early January next year – that may well promote sales of consumer devices in the run up to Christmas.

The government will also reduce corporation tax from 28 percent to 27 percent next year, and over the following three years will further reduce it until it gets to 24 percent. Tax on small companies is set to be cut to 20 percent.

Next year the government will introduce a bank tax, expected to raise £2 billion a year.

The news is good for smokers and drinkers. There is to be no immediate increase on duty on booze and cigarettes, while he has reversed a 10 percent tax on cider by 10 percent over the inflation rate at the end of this month.

The news is not so good for public sector workers, because their pay will be frozen apart from those earning less than £21,000 a year, who will get a £250 rise for each of the two years.

Last month, as we reported, Osborne introduced a freeze on IT projects over £1 million, and scrapped BECTA, the agency intended to promote IT in government.