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?
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