BUSINESS owners and leaders have hailed the budget a mixed bag, welcoming a fixed annual investment allowance and reduced corporation tax alongside worries over the impact of a compulsory Living Wage on small and micro businesses.

Chancellor George Osborne yesterday revealed Corporation Tax will be cut to 19 per cent in 2017, and 18 per cent in 2020, while annual investment allowance will be fixed at £200,000.

Other boosts to business included a 50 per cent increase in National Insurance employment allowance for small firms to £3,000 from 2016, as well as new apprenticeship levy for large employers in a bid to upskill workers.

Simon Williams, North Yorkshire region chairman for the Federation of Small Businesses, said: "We agree with the focus on productivity but need to see the details to raise skills through the apprenticeship levy on large firms.

"Planning reforms are also critical to raising productivity and again we look forward to seeing the proposals on Friday.

“However, even though offset by a welcome increase in the employment allowance, some will find the new National Living Wage challenging."

The chancellor announced the introduction of a new national living wage for all workers aged over 25, starting at £7.20 an hour from April 2016 and set to reach £9 by 2020.

Suzanne Burnett, president of York & North Yorkshire Chamber of Commerce said: "With regards to the introduction of a National Living Wage, most Chamber member companies already pay their staff at or above this level, however they will want assurances that its introduction follows an evidence-based approach, and minimizes impacts on smaller firms, for whom adjustment will be harder.

"Of relevance to this region was the announcement of funding for Transport for the North to promote integrated transport although devolution got only the briefest of mentions with confirmation that discussions were still under way.

"The Chamber is broadly supportive of the principal of devolving funding and powers to the region, although the devil is in the detail and we are keen to understand what is “on the table” and to ensure the business voice is heard in these discussions."

Also keen for more detail on the Northern Powerhouse is Roger Marsh, chairman of the Leeds City Region Enterprise Partnership, which covers York, who said: "What we need to see secured as part of ongoing discussions with government is a deal that would provide powers for our area to raise its own finances.

"Devolution is not real devolution without fiscal powers and we will continue to call for this as we work up the detail ahead of the Spending Review."

While praising the benefits to business, Nick Scull, tax partner at York accountancy firm Garbutt + Elliot, voiced concerns over additional tax on dividends.

He said: "Less encouraging is the additional tax on dividends that so many business owners rely on for their main source of income. For most he is putting an additional 7.5 per cent levy on all but the first £5,000 of dividends a year.

“It is good news though that the focus for raising significant additional tax has now also turned to those who are deliberately not complying."