Here’s your chance to be Chancellor! George Osborne will deliver the Budget next week, and fierce speculation about what it will include is mounting. We weigh up the rumours and ask what you’d put in the budget.
Budget Day is a big one in the world of money. A single speech by one person, which usually lasts for just an hour or so, contains announcements that will affect millions of people’s finances.
Decisions on tax, public spending and benefits are all unveiled at speed – leaving experts scrabbling to work out what the measures really mean, and who will be the winners, and losers.
But even before the excitement of the Budget kicks off (which you’ll be able to watch live on Which.co.uk next week), rumours about what the Chancellor is planning begin to swirl and fill countless column inches.
So, here’s a quick round-up of some of this year’s speculation…
Five big Budget predictions
The rumour: The 50% income tax band, introduced by Labour, might be abolished to appease top earners and some think tanks.
The reality: While some backbench Conservative MPs would no doubt like to see this happen, it doesn’t seem likely that the 50% tax rate will be scrapped next week. With the government focusing all its efforts on eliminating the budget deficit, cutting taxes for the wealthy would be difficult to justify.
The rumour: A VAT ‘loophole’ allowing cheap DVD, CD and game imports from the Channel Islands will be closed.
The reality: It’s certainly possible that George Osborne will change the rules surrounding VAT-free imports from the Channel Islands, preventing firms such as Asda, Tesco and Amazon from selling DVDs, CDs and computer games via the internet at rock-bottom prices. This might please big high street retailers such as HMV, but it’s likely to annoy some consumers. (You can read more about this issue in our news story on cheap DVDs and albums.)
The rumour: A ‘fuel duty stabiliser’ will be introduced to help stop petrol prices spiralling out of control.
The reality: With unrest still rocking parts of the Middle East and prices at the pumps already high, the government might decide to introduce the much-mooted fuel duty stabiliser. This would be designed to rise or reduce the duty payable on petrol and diesel in line with how much it costs consumers – and it would be a popular measure among motorists. It also seems possible that the Chancellor might cancel the scheduled increase in fuel duty for the coming tax year.
The rumour: National Insurance and income tax will be combined to simplify the tax system.
The reality: A pre-Budget report from the Office for Tax Simplification recently suggested that George Osborne might want to consider combining National Insurance with income tax, to make people’s tax affairs easier to understand and cut employers’ administrative costs. While it seems possible this step might be taken at some stage, it’s a big decision. While the Chancellor might announce his intention to move towards a combined system of taxation, it’s unlikely that this measure will feature in his speech next week.
The rumour: Means-tested pension benefits will be stopped, in a move to create a ‘flat-rate’ state pension that pays £140 per week.
The reality: Iain Duncan-Smith recently talked about the benefits of creating a ‘flat-rate’ pension system but stopped short of revealing any figures – so the jury’s out on this one!
What would you do?
So, what do you think about these five Budget predictions? Would you be glad to see any of these measures brought in, or are you staunchly against them?
What other secrets do you think might be lurking in Mr Osborne’s red briefcase, to be revealed next Wednesday?
And what would you do if you were Chancellor of the Exchequer? Where would you trim – or fatten up – spending, taxes and benefits?
Please share your thoughts with us below – and be sure to tune in to our live blog next Wednesday and find out whether your Budget wishes come true!