The key points of Chancellor George Osborne’s Budget on 21 March 2012.
- From April 2013, the 50p top rate of tax will be cut to 45p.
- Personal income tax allowance raised to £9,205 from April 2013, making 24 million people £220 a year better off, including higher rate earners.
- New general anti-tax avoidance rule to be introduced.
- Age-related allowances to be removed for new pensioners from April 2013, and replaced with a single personal allowance for all.
- Allowances for those already of pension age to be frozen, but George Osborne said “no pensioner will lose in cash terms”.
- Will be phased out when someone in a household has an income of more than £50,000. It will fall by 1% for every £100 earned over £50,000.
- Only those earning more than £60,000 will lose the entirety of the benefit.
- Independent Office for Budget Responsibility (OBR) revises up UK growth forecast for 2012 to 0.8% – from 0.7%.
- Forecast for 2013 is 2%, for 2014 is 2.7%, and in each of the two years after that 3%.
- Eurozone growth forecast for this year revised down from 0.5% to -0.3%.
- UK inflation forecast to fall from 2.8% this year to 1.9% next year.
- Borrowing this year to be £126bn – £1bn less than forecast in the autumn. Predicted to be £120bn in 2012-13 and £98bn in 2013-14. Forecast to fall to £21bn by 2016-17.
- Consultation to be held on offering gilts – government bonds – with maturity terms of more than 50 years.
JOBS AND SKILLS
- OBR forecasts unemployment to peak this year at 8.7% before falling each year to 6.3% by 2016-17.
- One million more jobs to be created in the economy over five years, OBR says.
- From midnight, new stamp duty level of 7% for homes worth more than £2m. Any such homes bought through companies will pay 15%.
- Extra funding to help construction firms building new homes.
HELP FOR BUSINESS
- Corporation tax cut to 24% from next month. By 2014 it will fall to 22%.
- Enhanced capital allowances for businesses setting up in new Scottish enterprise zones in Dundee, Irvine and Nigg. A Welsh enterprise zone to be created in Deeside.
- Consultation on simplifying the tax system for small firms with a turnover of up to £77,000.
- Government support for £150m of tax increment financing to help councils promote development and an extra £270m for the Growing Places fund.
- Tax relief for the video games, animation and high-end television production sectors.
- Government considering enterprise loans for young people to start their own business.
- Relaxation of Sunday trading laws on eight Sundays during Olympics and Paralympics, starting July 22.
- Cost of operations in Afghanistan to be £2.4bn less than expected.
- Money saved will provide an extra £100m to improve military accommodation.
- Personnel serving overseas will receive 100% relief on an average council tax bill.
- Families welfare grant also doubled.
- Government evidence to be published on the case for regional public sector pay.
- Option for government departments to move to regional pay structures for civil servants when current freeze ends.
- “Major package of tax changes” to boost oil and gas extraction in North Sea, along with £3bn new field allowance west of Shetland.
FUEL, CIGARETTE AND ALCOHOL DUTIES
- Duty on all tobacco products to rise by 5% above inflation from 18:00 today – the equivalent of 37p on a packet of cigarettes.
- No change to existing plans on alcohol duty.
- New duty on gaming machines at a standard rate of 20% and a lower rate for low-prize machines of 5% of net takings.
- No change to existing plans on fuel duty. Vehicle excise duty to rise by inflation, but frozen for road hauliers.
- Existing fair fuel stabiliser means above-inflation rises in fuel duty will return only if price of oil falls below £45 ($70) a barrel.
- Automatic review of state pension age to ensure it keeps pace with increasing lifespans.
- New single-tier state pension for future pensioners to be set at about £140 and based on contributions.
TRANSPORT AND INFRASTRUCTURE
- Extend electrification of the Transpennine route between Manchester and Sheffield. Further improvements to the lines between Manchester and Preston, and Manchester and Blackpool.
- Report on the future of aviation in south-east England to be published in the summer.
- Funding for superfast broadband and wi-fi in the UK’s 10 largest cities.
OTHER TAXES AND ALLOWANCES
- Bank levy to be increased to 0.105% from January 2013 “to ensure that corporation tax cuts do not benefit the banks”. The levy will raise £2.5bn a year.
- New cap on tax reliefs set at 25% of total income for anyone claiming more than £50,000 in a year, but no significant change to pensions relief.
- VAT loopholes and anomalies to be removed – including removing exemptions for sports nutrition drinks and hot takeaway products in supermarkets.
- Existing exemptions will remain for food, children’s clothes, books and newspapers.
- Personal tax statement to be sent to 20 million taxpayers from 2014.
- Government to seek “major savings” in the administrative cost of the Carbon Reduction Commitment, and bring forward an alternative environment tax this autumn if such savings cannot be found.
Please note: Information in this blog post is content property of the British Broadcasting Corporation (‘BBC’) and the full original article can be found by clicking here.