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British Budget: Osborne announces plans to cut British corporation tax to 22pc

BRITISH chancellor George Osborne has announced plans to cut the country’s corporation tax rate to 22pc eventually bringing it closer to the Irish rate of 12pc.

Speculation had been growing ahead of today’s budget that moves would be made to attract more foreign direct investment.

The rate, currently at 26pc, will fall to 24pc from April 1, and to 22pc eventually.

The move will also make Northern Ireland more attractive to foreign investors.

But the bank levy is to be increased from January 2013 so that institutions will not benefit from additional corporation tax cuts.

In other moves, Mr Osborne said he intended to cut the top rate of income tax, aimed at high earners, from 50pc to 45pc.

Mr Osborne also said he expects the British economy to avoid a technical recession.

His office has raised its forecast for UK growth to 0.8pc this year and 2pc in 2013.

Mr Osborne said the UK's budget deficit would fall to 7.6pc of GDP next year.

But he added that the eurozone debt crisis and high oil prices represented risks to the UK's economic forecasts.

He also announced plans to look at offering longer-term British government bonds of more than 50 years, and possibly a perpetual bond with no fixed maturity date.

Mr Osborne also announced tax breaks for video games, animation and high-end TV industries.