Highlights of Budget 18th March 2015

Growth

In 2015 revised up to 2.5% from 2.4% in the autumn statement

The economy is forecast to grow 2.3% next year before reaching 2.4% in 2019

Inflation

Forecast at 0.2% this year and the next three years. Bank of England’s monetary policy committee mandate remains at 2%

Banks

A total of £5.3bn of extra taxes to come from the banking sector over five years as banks are stopped claiming relief on compensation claims and the bank levy – intended to bring in £2.5bn of revenue a year – to be increased to 0.21% to bring in extra £900m.

£13bn of mortgage loans still owned by the government from Northern Rock and Bradford & Bingley to be sold

Another £9bn of Lloyds Banking Group shares to be sold this year – to be used to sell down the national debt

RM: He says the money raised from the bank sale will be used to pay off national debt and not fund pre-election giveaways in a move that may disappoint Tories fighting marginal seats.

Debt

As a proportion of GDP, 80.4% in 2014/5, 80.2% in 2015/6 to reach 71.6% in 2019/20

RM: Osborne is now able to say his original target has been met of getting the national debt share falling by the end of the parliament – although it is still a year later than predicted in emergency budget in June 2010

Borrowing

£150bn at the start of this parliament. To be £90.2bn this year, £1bn lower than in the autumn statement

Surplus to reach £5bn. At the autumn statement the surplus was projected to be £23bn in 2019/20

RM: The massive fall in the surplus Osborne was predicting for 2018-19 means less opportunity for promised future hand-outs. It is an easing of his plans for austerity that may be designed to kill Labour’s argument that he was shrinking the state to size of 1930s.

Pensions

Lifetime allowance cut from £1.25m to £1m and index-linked from 2018

RM: This decision is a political trap for Ed Balls. Osborne poached the plan from Labour, which said it would be used to pay partly for the tuition fees cut.

Tax avoidance

Diverted profits tax to be introduced into legislation

RM: Labour has made tackling tax avoidance a major campaign issue. This appears to be an attempt to put the Conservatives on the same page when it comes to stopping multinationals shifting profits offshore. However, yet more claims of raising money through cracking down on tax avoidance may be met with scepticism as they rarely seem to raise as much as expected.

North Sea

To receive an extra £1.3bn through a number of measures, including cutting the petroleum revenue tax to 35% from 50% and cutting the supplementary charge to 20% from 30%, back-dated to January

Businesses

Abolish annual tax return

Abolish national insurance contribution for the self employed

Alcohol

1p off a pint of beer

2% cut in cider duty and whisky duty

Wine duty frozen

Petrol

Fuel duty frozen

Personal tax

Allowance raised to £10,800 (from £10,600) and to £11,000 the following year

Higher rate threshold raised above inflation rate

Savings

A personal allowance of £1,000, or £500 for higher rate tax payers (over £42,701), on interest received on savings

ISA freedom: £15,240 tax free allowance remains even if cash withdrawn

First time buyer ISA: £200 saved, government puts in £50

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s