/ Money

Budget 2012 – what will George Osborne do for you?

A year on from Chancellor George Osborne’s ‘Budget for Growth’ in 2011, Britain and consumers are still in poor financial health. So what do we want from the government’s 2012 Budget?

The economy shrank last month, renewing double recession fears. Unemployment continues to rise and global ratings agencies appear to be on a constant threat to downgrade the UK’s credit rating.

Worse still, we’re struggling to get by in our everyday lives. Our Consumers 2012 report found that, among other things, some people are going into debt to pay for everyday essentials like food.

Budget 2012 speculation

However, the Budget this year looks set to be less about how hard-pressed consumers can be helped, but where the nation itself can start saving even more money. Among the speculation for next Wednesday’s Budget speech are:

  • The abolition of child benefit for higher rate taxpayers.
  • A loss of higher rate pension tax relief.
  • A cut in how much you can annually contribute to a pension.

On the plus side though, there’s talk of personal tax-free allowances increasing to £10,000, which will give a great number of people a little bit of relief. And rumours are rife that VAT may come down back to 17.5%.

What Which? wants to see from the Budget 2012

Clare Corbett, principal advocate at Which?

We’d like the government to allow transfers from child trust funds (CTFs) into Junior Isas, so that all children have access to the very best savings rates. Currently, children who took out a CTF are trapped in products that are paying poorer interest rates than Junior Isas.

It would be a positive development for children and parents if they could transfer their savings into the new Junior Isa products.

Richard Headland, Which? Car Editor

Given current record fuel prices, we would hope that the Chancellor will scrap August’s planned 3p duty rise. However, Osborne has already indicated that a duty cut (as see in last year’s budget) is unlikely.

We would also welcome the scrapping of VAT on child seats, as the law considers these to be a mandatory safety item.

The Chancellor is also due to confirm the next tranche of rates for Vehicle Excise Duty (car tax) and company car tax. Both systems already reward cars with low CO2 emissions, and it’s possible the bands will be tightened further as average vehicle CO2 emissions fall.

Still, we’d welcome a wider review of how CO2 emissions are calculated for electric and part-electric cars, as their carbon footprint is very different depending on whether they’re charged from the National Grid or from a renewable energy source.

Pete Moorey, principal Which? advocate

We’d like the government to scrap the ‘carbon price floor’ in 2012’s Budget. We don’t think this tax on energy firms will achieve its aim of encouraging significant new investment in low-carbon electricity, and we worry it will hit cash-strapped households unnecessarily.

So, a decision by the Chancellor to abandon this unnecessary measure would send a clear signal that consumers are at the heart of the government’s energy policy.

But what do you want to see from the Chancellor’s 2012 Budget? Is there anything George Osborne could announce that would make your life easier?

Comments
Guest
Pam says:
16 March 2012

What I would like to see in the budget is a maximum wage! If this means the so called ‘best’ people move abroad then so be it. I am sure there are plenty of others who can replace them from the unemployed. The Prime Minister ‘runs’ the country and is where the buck stops. Nobody should be earning more than him/her. The big bonus culture should also be curbed. The people who work at the coal face should get the bonuses, not the faceless beaurocrats who work behind the scenes creaming off the best bits for themselves. If this was done then Britain could pay off the National Debt, stop borrowing and start to live within its means. The banks should be using their profits to pay back their debt to the tax payer and this should be done before anyone gets a bonus. David Cameron talks about a fair Britain but that will never happen unless drastic steps are taken to stop the rich getting richer and the poor getting poorer. The ordinary man in the street is blameless in this crisis yet is paying for it with unemployment, cuts in health, education and public servises, and increased taxation. What is fair about that?

Guest
Rene says:
16 March 2012

This is clearly the best comment except that it is wishful thinking. It may be achieved in a democracy for the common people after major restructuring, but sadly, our democracy is for the very rich. I won’t spell out the evidence except to say that it does not matter whether it is a Tory or Labour government.

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Guest

I would want the amount one can earn before tax to £12,000 and also the ISA allowance to go up to the same level. I doubt the tax will, but the ISA allowance might

Guest
Colin Overall says:
16 March 2012

What do we want from the Chancellor’s next budget?

A better deal for pensioner savers in their twilight years, since many of them have spent over 40 years in work trusting that in retirement they would benefit from the financial care they maintained throughout their working lives.

Guest
Alan Greenslade says:
16 March 2012

50% tax band to stay.
Mansion Tax to be added.
Disability benefit assesses on proper criteria not on forcing people back to work who shouldn’t be.
Child Benefit removed for all earning over 40% tax band.
Substantial increase in State Pension.
Minimum Tax Free Allowance raised to 12,000.
Rebalancing the economy by hitting the bonuses and obscene salaries and helping the poor, elderly and unemployed.
The government is ideologically only interested in the rich.

Guest
Will'O'The Wisp says:
16 March 2012

Isn’t about time Stamp Duty was re-indexed in line with the last 25 years of house market pricing? This was the original “Mansion Tax”, in that it only affected a small number (<1%) of high priced households but the trigger rate has been at the same levels for decades now such that over 75% of house purchases now enjoy the additional taxation gift to the Treasury. It needs reforming soon if we want to lift the house market off the floor. First time buyers have been given the opportunity of a Stamp Duty holiday for the last year if buying for less than £250,000, but it has not had the desired effect of stimulating their interest, which is no surprise considering the 20% deposits required by lenders. However it is further up the price chain where the real blockage is – a sudden jump to 3% at £250,001, not even a progressive sliding scale increase to 2%. Stamp Duty @ 3% is an artificial barrier to house purchases in the £250-£500K range.
Stamp Duty ought to start at a much higher figure than the present £125,000 trigger. £250,000? £500,000? with a smooth sliding scale of percentages. It would help to stimulate the construction industry again and provide some much needed affordable housing. Agree? Disagree?

Guest
Phil says:
16 March 2012

I don’t even earn enough to get up to the current tax threshold. However I would just like a simpler, and fairer tax system. A society where it is obviously worth earning and working; worth saving and having a pension; and a reduced quality of life if you want to just live off the state. Less benefits; less reliefs. Informed opinion says if you charge top rate tax of 50% you actually get less tax paid into the Exchequer; so less ‘knee-jerk’ reaction to stopping well paid people and more common sense would be good. The Sun and The Daily Mail don’t actually run the country – someone should tell them. After all if you earn a lot, and with removal of ‘loop holes’ cannot avoid 40% tax, then you pay a lot too. I do not agree in statutory limits for pay (anyone remember the Soviet union?) but I do think there are some very, very over remunerated people who display rubbish performance. But hey, the chancellor knows all of this.

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Guest

I want to see the rich being taxed in such a way they can’t avoid it – At the moment all I’ve seen is the rich being allowed to avoid tax – the poorer being penalised for being poor.

Banks should have to prove effectiveness – BEFORE bonuses – not getting obscene pay for poor performances then even more obscene bonuses. Maybe a super tax on bonuses at say 90% and to ensure they do not avoid it.

It is the Tory way – I just disagree with it.

If he did – I might believe “we’re all in this together” – at the moment we are definitely NOT.

Guest
Sylvia says:
17 March 2012

I would like to see a reduction in Fuel Tax. The amount the government is raking in is obscene and puts up the price of everything including food which hits the lower paid, however don’t hold your breath.

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Guest

My fantasy budget would be one where everybody was told the total amount of tax they had to pay to the government for the year ahead, but then would be given the choice of where they would like their hard-earned cash spent!! It’s the ultimate in democratic process, so of course it will never happen – but in the meantime I daresay we can rely on the People’s favourite photo-opportunist and Gorgeous George to continue to roll out their “we’re all in this together” fiscal policies that seem to hammer the average wage-earner and tickle the rich.

Guest
CeeCee says:
18 March 2012

I would like employers to be encouraged to allow and enable their employees to work from home (when their job permits); there must be millions of people like me who are sat in front of a pc and with a phone doing work that they could do at home. This would reduce the number of commuters and reduce the carbon footprint. Meetings could be held via webcam. Naturally the employee should not be penalised and their extra overheads (electricity, broadband, hardware, etc.) should be met be either the employer or by a tax break like their PAYE code being modified and giving them more freepay before tax kicks in.

I also agree that the higher tax rate should remain, and a mansion tax imposed for anyone living in a property valued at over £1,000,000. I’d also like larger private vehicles and high performance vehicles – regardless of emissions – to pay much more tax on these extravagant playthings. One final thing I think should be introduced is a MOT test, rider training, and vehicle tax on cyclists – they use the roads, are often dangerous due to no lights/poor visibilty and lack of skill/total disregard for other road users. BTW I am not anti-cyclist, as a former city team captain as a cyclist, I’m just alarmed/disgusted by the antics of many (not all) people who ride bikes.

Guest
ronald bell says:
18 March 2012

i am a state pensioner in receipt of the state pension and the state second pension, i worked from leaving school at 15 until i retired at retirement age, and paid income tax for the whole of that period. In Dec 2011 i recieved a tax demand for £320 for tax year 2011/12 this works out at about £6.15p per week. I assume because of the pension increase for 2012/13 of 2.5per cent then my tax bill for that year will be even greater than the previous year. I think it is a disgrace that people who have had a full working life should be paying tax in retirement. I would like the chancellor to exclude pensioner in this position from paying tax

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Guest

My #1 item I would like to see in the budget is shared personal allowance between parents of children who live together. I just earn over the upper tax threshold so portion of my salary is taxed at 40%, my fiancée is about to have our baby and she is only working part time (~2k per year). Because I earn a little more, I pay a huge amount more tax and we miss out on other benefits too. If we were both working full-time we could earn more and pay less tax. It doesn’t seam fair to put pressure on mothers to go out and work with young children.

Profile photo of oj
Guest

Most people are looking for different things from the government in the budget Some of the demands are selfish
I believe that the government should retain the 50% tax It should also increase tax on non essential items selectively
Surely a millionaires tax should be introduced one way or the other It happens. through property tax so be it
These are tough times and I believe the government should not be giving too much away because it is already broke It needs to raise money Everyone earning more than £25000 should pay a little bit more tax Oh yes! We all use the services provided by government The country is being downgraded in credit rating and everyone is asking for it to give more to the society? Do you want us to be like Greece ? Prevention is better than cure Let’s raise money from the citizens through different forms of tax before its too late
Everyone blames bankers That doesn’t solve the problem We should also blame ourselves as well because some banks went down because of individuals who gave false information to obtain loans which could not be serviced. It takes two to tango . Enough of the blame game It’s time to shut up and move on
The government needs a thick skin in order to increase tax They are scared of loosing. power A 10 p increase would not cause dramattic change Personally l believe that we should be willing to support our country. I know that there are people who cannot afford it Hence it should be a progressive tax

Ask not what your country can do for you but what you can do for your country( apologies to JFKennedy) The country has no money of its own It’s operating on ‘ credit card ‘. We have to be careful I must repeat that I am aware that not everyone can contribute hence any measures should be progressive or relative . The bottom line is that we should be willing to sacrifice in order for our country to survive these hard times OJ

Guest
Pam says:
18 March 2012

Are you a banker?

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Guest

Pam

That was exactly my thought! 🙂

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Guest

Hello Pam and Richard, best not to accuse other commenters of being ‘bankers’ or anything else for that matter just because of the opinions they have expressed. Thanks, Patrick.

Guest
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25 November 2012

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