Hazlewoods LLP is a leading firm of business advisers and chartered accountants in the three counties of Worcestershire, Herefordshire and Gloucestershire.

Melanie Maycroft, tax manager, provides an overview of the Chancellor's Budget on Wednesday, March 22.

Gordon Brown delivered overall a fairly neutral and highly political budget. The Chancellor reported that "the British economy is strong" and for the 10th successive year growth has exceeded that in the Euro area.

Prior to the 2012 Olympics he announced resources would be focussed in this area including a £600m fund for elite athletes and £34m National Sports Foundation.

Spending will also be increased on education more than three-fold over five years to bring investment in line with private schools with free further education for anyone up to the age of 25 introduced.

Businesses will be pleased with only limited increases in tax. As announced in the pre-budget report the 0 per cent starting rate of corporation tax will be replaced with a single rate of 19 per cent.

First year capital allowances for small businesses investing in plant and machinery were raised from 40 per cent to 50 per cent..

Tax avoidance was again high priority. Measures covered included VAT fraud and a loophole in the Stamp Duty Land Tax legislation.

There were changes to reliefs for investments into Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EIS) to assist smaller growing businesses.

Income tax relief for investments into VCTs was retained at a slightly lower rate of 30 per cent and the level of investment eligible for relief in EIS companies was doubled.

However, qualifying companies for both schemes have been significantly reduced as the gross asset limits have been approximately halved. For individuals, a significant blow was delivered by almost complete removal of the favourable Inheritance Tax (IHT) treatment of certain types of trusts set up for family wealth planning.The changes will often apply to existing trusts.

The IHT exemption was only raised in line with inflation to £285,000 leaving many estates within the charge despite the only significant asset being the family home. On the other hand, there was a boost for families with increases in child-related benefits, tax credits and the personal allowance. In addition, youngsters in receipt of Child Trust Funds will now get an extra £250 or £500 at age seven.

However, last year's £200 payment to assist pensioners with their Council Tax bills was not continued. First-time buyers will be marginally assisted by an increase in the stamp duty exemption from £120,000 to £125,000 and a £970 million shared equity scheme.

The most polluting cars will be hit with a £210 road tax bill whilst the least polluting cars will have no road tax at all.

The only problem with this is that non of these cars are actually available in the UK at present. Duty on petrol has again been frozen until September.

Increases in tax on cigarettes, wine and beer of 9p, 4p and 1p respectively were announced whilst duty on spirits, sparkling wine and cider was frozen.

Further information can be obtained by contacting Graham Rew or David Williams at Hazlewoods LLP's Worcester business team on 01905 854067 or by e-mail at gr@hazlewoods.co.uk or dw@hazlewoods.co.uk