Chancellor George Osborne was on his feet in the House of Commons presenting a ‘tax neutral’ Budget aimed at stimulating business growth.
The Budget has little wiggle room for cutting taxes due to the state of the post-
recession economy in the UK.
Few taxpayers will notice any change to the pound in the pocket despite the
hype.
The most unexpected change was a 1p per litre cut in fuel duty bundled with
delays in other fuel duty rises.
Here are the major changes:
Tax and duty
• Personal tax allowance to rise to £7,475 from April 6, 2011, and by £630 to
£8,105 from April 6, 2012. The higher rate tax threshold for 40% taxpayers will
drop to £37,500, which should bring 750,000 more people in to the higher rate
tax net.
• 43 tax reliefs abolished to simplify the system. Most are little used or do
not affect ordinary taxpayers – like duty on angostura bitters, black beer and
Millennium Gift Aid that will not be used again until the year 3000.
• Long-term review aimed at merging income tax and national insurance
contributions to simplify tax collection. This review will probably encompass the
controversial revamp of IR35 tax rules for contractors and freelances.
• 10% inheritance tax discount for anyone giving 10% of their estate to charity
• No change to alcohol and tobacco duties- but they will see a rise of inflation
plus 2%.
Fuel duty
• Fuel duty cut by 1p a litre from 6pm March 23, 2011 and inflation rise in fuel
duty planned for next week to be delayed until 2012. Fuel duty escalator that
adds 1p to fuel duty on top of inflation each year cancelled for this Parliament.
Public sector
Pay rise of £250 for armed forces, prison, NHS, teachers and civil servants
earning under £21,000.
•
Housing
£250 million to help first-time buyers buy new build homes.
•
Jobs
• Youngsters will have the chance to grab new work experience places, which
increase to 100,000 posts over two years
• Funding for 40,000 new apprenticeships for young unemployed to encourage
young people to take up trades like electricians, plumbers and builders.
Pensions
• Long-term objective for flat rate £140 a week state pension, but no
retrospective change for current pensioners.
