Speculation has been high but now the wait is over – Chancellor Gordon Brown has delivered his annual Budget Report and now the debate begins as to who will be better or worse off. Here’s a summary of the major changes.

Changes affecting business:

• Small companies' corporation tax rate reduced from 20 per cent to 19 per cent, with a zero rate for the first £10,000 of profit
• VAT concessions for an estimated 700,000 small businesses, including flat rate payments and abolition of automatic fines for late payment
• A 20 per cent cut in capital gains tax if assets are held for a year and 10 per cent for assets held two years or more
• £150m over three years to help small firms with tax and payroll administration, in an effort to get all tax filings online
• To encourage regeneration in deprived areas, stamp duty will be abolished on commercial properties in these areas
• To combat the skills shortage, the Government will provide £30m to help SMEs achieve Investor in People standards; also, the long-term unemployed will be required to attend mandatory work preparation courses
• Capital allowances of 100 per cent for investment in green technology

• Extension of working families tax credit extended to single people
• Child tax credit ceiling raised to £58,000 and higher levels of support
• An extra 1 per cent National Insurance contribution on pay above £4,615 for employed people, self-employed people and – the big surprise – employers to pay for health service improvements

• Plans to introduce a road user charge for foreign lorries
• Duty incentives for sulphur free fuel
• Cuts in licence fees for environmentally friendly vehicles
• Licence fees for all other cars, vans and lorries frozen
• Fuel duties frozen

• Reduced excise duty on beer from small breweries/village pubs – 14p off a pint
• Duty frozen on beer, wines and spirits, but index linked on cigarettes
• Tax-free betting extended to bingo

But does the Budget stack up to the desires and expectations of businesses? Here’s the reaction from the Federation of Small Businesses (FSB) and the Confederation of British Industry (CBI).

FSB policy chairman John Walker was disappointed with the rise in National Insurance contributions. He says, "The rise in employers' National Insurance is a direct increase in business costs and when combined with the increase in the employees' NI contributions, this is the equivalent of an increase of 2p on income tax.

But the changes to VAT were very welcome. He says, "The administration of VAT is a major headache for all small businesses. We have been pushing for VAT simplification over many years and a flat rate will give real benefits to small businesses, possibly as high as the Chancellor's estimate of £1,000. Up to 700,000 small businesses will be affected once the flat rate is extended to businesses with a turnover under £150,000. We are also pleased with the abolition of automatic VAT fines."

CBI Director-General Digby Jones also had a mixed reaction to the Budget. He says, "The Chancellor has left business in no doubt that he is committed to encouraging enterprise. The tax improvements, including the red tape burden, are welcome. We especially welcome the financial help for small businesses gaining accreditation as Investors in People."

However he adds, "We are worried that he is now imposing a business tax burden that impacts directly on the cost of employing people at a time when UK competitiveness is being put to the test. An increase in employers' NIC's impacts on every business of every size regardless of whether or not they are making profits.”