However, the 2% cut in the main rate of corporation tax to 28% from April 1 2008 stands to benefit larger firms achieving profits of £1.5m or more annually.
Allowances on the cost of constructing premises in enterprise zones will be phased out by 2011.
However, 100% business premises renovation allowances are available on qualifying expenditure on renovation of business properties that have been vacant for at least one year in designated areas.
Stephen Quest, tax partner at Grant Thornton says: “The new rates effectively kick-start the process of modernization of the capital allowance system. Brown’s corporation tax cut from 30p to 28p is welcome but late and still not competitive enough.
“UK corporates are still operating within a tax regime two and a half times the rate of Ireland and three times more than the EU average”.