BUSINESSES in York will not be celebrating the reduction of corporation tax from 26 per cent to 24 per cent as fuel duty threatens to overshadow the benefits.

Mike Pullon, managing director of Varlink, a £9 million-turnover mobile technology business, based in Osbaldwick, said the extenstion to the cut in corporation tax would spare them a couple of thousand pounds, which may well be swallowed by the fuel duty increase.

He said: “It was already going to be cut to 25 per cent, but it is better for us to have that per cent than for the Government to have it.”

He said that the one per cent equated to about £2,000 in a company their size, so it was an incentive to make more profit, because it would retain more of it.

Driving about 50,000 miles a year as a business, he didn’t expect direct fuel costs to increase by that, much but was concerned about carriers increasing their prices.

He said: “Yes of course it’s good to have a cut in corporation tax and to have that one per cent here gives us flexibility to make sure costs that we can’t control don’t push up prices. But I won’t be holding a party in celebration. I have been through worse budgets from a business point of view.”