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Today’s Budget – how positive was it really?

Chancellor of the Exchequer George Osborne holding the red budget box, photo by Andrew Parsons

From increasing the personal tax allowance, to better tax relief for new businesses, are you convinced that this year’s Budget has done enough to help people out in austere times? Or is it too little too late?

Our money experts have been busily following today’s Budget and summarising the key points.

Chancellor George Osborne said the focus of these measures was to provide a ‘budget for growth’ in order to give a boost to the stalled economy:

‘Last year’s emergency Budget was about rescuing the nation’s finances, and paying for the mistakes of the past. Today’s Budget is about reforming the nation’s economy, so that we have enduring growth and jobs in the future.’

Are you convinced that today’s Budget will have a positive effect? Here’s a summary of the key points for you to mull over…

Personal taxes and duties

  • New tax avoidance measures to raise £1 billion.
  • Changes to Gift Aid – the amount that you can give without filling out forms has increased to £5,000.
  • Personal tax allowance will increase to £8,105 in April 2012.
  • On Air Passenger Duty, a tax per plane, rather than per passenger, would be illegal under international law. The government will campaign to change the law. A planned air passenger duty rise will be delayed for a year.
  • No further change in rates on alcohol duties other than those already announced. Tobacco duty rates up by 2% above inflation.
  • Fuel Duty Escalator will be cancelled for the rest of this Parliament. Fuel Duty to be cut by 1p per litre today and the planned 4p per litre rise to be delayed until 2012. The new Fair Fuel Stabiliser will be funded by increasing the supplementary charge on North Sea oil and gas production from 20% to 32%.

Taxation

  • There will be a consultation on merging National Insurance and Income tax. The aim is to make the tax system ‘fit for the modern age’.
  • Corporation tax is to be cut by 2% rather than 1%. Bank levy rate to be adjusted to offset its effect.
  • Help for start-ups and new small businesses. Income Tax relief on the Enterprise Investment Scheme will increase from 20% to 30% in April 2011.
  • The charge for non-domiciles will be increased to £50,000 for those who have been in the country for 12 years.

Growth and development

  • New shared equity scheme ‘First Buy’ will help 10,000 people get on to the property ladder for the first time. This will cost the government £250 million and be funded by the bank levy.
  • There will be £100 million extra on the science budget and £200 million extra allocated to upgrading regional railways. The aim is to create 21, and not 10 as originally planned, new ‘enterprise zones’.
  • £2 billion committed to the Green Investment Bank which will start work in 2012.
  • The small business rate relief holiday is being extended by one year to October 2012, at a cost of £370 million.
  • 24 new university technical colleges will be created.

Economy

  • Inflation expected to be between 4% and 5% this year, falling to 2.5% and 2% over the following 2 years.
  • Borrowing to fall to £122 billion next year, dropping to £29 billion by 2015-16.

What do you think of today’s Budget?

So will today’s Budget announcements have any impact on your life? Do you think it’s a positive Budget – as Osborne would like us to believe – or should the focus have remained on further cuts?

Comments
Member

The Government want to reduce bureaucracy in pension calculation but propose to make the change for future pensioners but not existing. At the same time they are planning to increase the age at which the State pension is drawn.

Are they complete idiots or is it just spin and will be quietly dropped?

There are far more currently receiving a pension than those who will receive it in the foreseeable future so this will increase bureaucracy. Especially as the dreaded “died in service” will return reducing the number of future pensioners.

Member
Sallyb says:
24 March 2011

Once again the pensioners are left in the lurch, everything rises except their pensions. We pay out more to legal & illegal immigrants. We should pull out of the EU the money we would save would pay off out debts in no time.

Member

As a “pensioner” on £70.00 per week state pension who earned at the most £15000 per annum by working six days a week including evenings and weekends, I have to empathise with Richard above, only of course I have to continue working for a minimum wage. I feel very angry about pensioners who complain that they only have £22000 a year to live on. On that amount I’d have had a charmed life.

Member
tabalf says:
25 March 2011

Why has the Chancellor not abolished the recent loss of personal allowance for those with incomes between £100,000 and £113,000 introduced recntly by Labour? This causes a marginal tax rate of 60%, higher than those earning more than £150,000. Surely he could have achieved the same revenue by lowering the 50% threshold to say £125,000 or £130,000, the level at which pension contributions are capped.
There are other inequities with marginal rates, over 70% for incomes between £7475 and £27,000 and again between £40,000 and £43,000. These would be a bit more complicated to rectify due to these numerous benefits that are lost at these levels.

Member

Basically, he needs the money. Unfortunately, income tax isn’t really about being fair.

The problem is the system is FAR too complex for everyone and the result is these anomalies. Another example is child allowance discrepancy between a single earner and dual earners.

I could ask why those of us between 65 and 74 who receive an age-related allowance lose the allowance £1 for every £2 above the allowance (currently £9490). Its the same for 75 and above but a slightly higher threshold.

He who giveth, taketh away. Roll on tax and pension simplification.

Member

Terfar –

It is much worse – what about long term care? Why should I as a pensioner have to pay up to £30,000 a year for long term care until I have no money – that someone of say 55 gets absolutely FREE??

Or – the fact if I go in hospital for any time my pension of £97 is reduced to zero – leaving me to pay to keep my home together without money – yet a person say of 50 will get sickness benefit. Why don’t I get sickness benefit??????

I can only assume that pensioners are to be punished for being alive.

Frankly I haven’t been “giveth” – I paid for my pension for 45 years – yet I am certainly suffering the “taketh away”

Member

A Budget without a ballanced pain distribution would be foolish. My enduring worry is “what would Labour have done to fund the exchequer without weakening the spirit of their electorate?” After all, on who’se watch did the Financial Metdown happen. Who advised all the Labour Councils to place their Funds in the Icelandic Banks – to dissappear into the Ether a few years later?
The massive Debt must be closed as soon as practibly possible, but the wealthiest must also contribute.
And it must not happen again!! I love my Pension and want to be able to enjoy it as well as the next Family. I hope my sore comments do not offend the innocent, or the less so. But draw COMMENT.

Member

Despite Cameron pledging to retain fuel allownace, he’s reduced it for all pensioners and why are existing pensioners not receiving the uplift that new pensioners will receive, i.e. £140 basic pension?
We will have a two tier pension society but he didn’t have the guts to highlight this.

By the time the increase in personal allowances comes in next April any benefit will have been eroded.

Same old Tories is spot on, roll on the next election.

Member

I think it is because existing pensioners are older and so will die faster by reducing pensions through the CPI fraud by starvation – and reducing the Winter Fuel Allowance just to increase death rates by hypothermia.

But as you say – continuation of the Thatcher policy removing the link to average earnings.

Never mind the cuts will hurt everybody but the rich – Bit sad that pensioners will suffer most – and will not be able to safeguard their pensions because they are too old and risky to get insurance or assurance whereas worker will be able to (or at least the wealthier ones).

Roll on the next march – it may persuade the Lib-Dems to break up the coalition or face removal from the