MISSED the Budget? Here are the main points.
George Osborne said his austerity squeeze on public sector spending would end a year earlier than expected as official forecasts revealed an improved picture for the UK economy.
Mr Osborne claimed Britain was “out of the red and into the black” as he unveiled an outlook showing that borrowing is set to be £5 billion lower than expected over the next three years.
The Chancellor also revealed improved growth projections pencilled in by the independent Office for Budget Responsibility (OBR).
Meanwhile, the level of national debt is also expected to start falling earlier than was previously thought.
Mr Osborne said: “This is a Budget that takes Britain one more big step on the road from austerity to prosperity.”
The Chancellor revealed the OBR expects gross domestic product (GDP) to grow by 2.5 per cent this year, up from a previous estimate, at the time of last December’s Autumn Statement, of 2.4 per cent.
Its forecast for 2016 growth is upgraded from 2.2 per cent to 2.3 per cent, but for 2017 it is downgraded from 2.4 per cent to 2.3 per cent, while for 2018 it remains at 2.3 per cent. In 2018 it is expected at 2.4 per cent, up from 2.3 per cent.
Plans for a saving revolution were unveiled by George Osborne as he announced a string of incentives aimed at making it easier for people to build up their nest eggs. A new tax-fee allowance of £1,000, a Help to Buy Isa for people aspiring to get on the property ladder and a further relaxation of the Isa rules were all unveiled in the Budget.
The Chancellor said that a new personal savings allowance will take 95 per cent of taxpayers out of savings tax altogether. From April 2016, a tax-free allowance of £1,000, or £500 for higher rate taxpayers, will be introduced for the interest that people earn on their savings.
If a saver is a basic rate taxpayer and they have a total income up to £42,700 a year, they will be eligible for the £1,000 tax-free savings allowance.
If they are a higher rate taxpayer, earning between £42,701 and £150,000, they will be eligible for a £500 tax-free savings allowance.
Scotland’s video games industry is set to benefit from a £4 million package of support aimed at encouraging young entrepreneurs in the sector, as part of the Chancellor’s plans aimed at boosting jobs growth and business start-ups.
A “prototype fund” will make grants available to help new computer games firms get off the ground in Scotland over the next four years.
Scotland will receive a total of £4m, with Dundee, which is a major centre for the computer games industry, expected to receive significant financial benefits from the fund.
Up to 250 jobs will likely be created as part of the scheme, which will see computer games entrepreneurs able to apply for grants to develop their business ideas.
The plan was announced as part of a coalition government plan to boost investment and jobs growth in the creative industries, across the UK.
A UK government spokesman said: “Today’s budget will bring in a range of measures which will support key Scottish business sectors, workers and families. It includes a package of measures aimed at the creative industries, including film, TV and video games production. The video games industry, much of which is centred in Dundee, will benefit from a £4m support package.”
George Osborne set out his vision for building a “northern powerhouse”, as he told MPs that employment and jobs grew faster in the north than the south during the past year.
Mr Osborne, who represents a constituency in north-west England, announced flagship plans to boost investment in northern English areas, such as Greater Manchester, which will be allowed to keep 100 per cent of growth in local business rates.
However, the Budget also included plans to move towards City Deals for Aberdeen and Inverness, packages to fund employment programmes and transform infrastructure in the cities along similar lines to the £1.3 billion Glasgow City Deal signed last year.
The UK government stated that it “is opening negotiations with local partners and the Scottish Government towards City Deals for Aberdeen and Inverness”.
A new city deal has also been agreed with the West Yorkshire combined authority, Mr Osborne said, at a time when Yorkshire has created more jobs than France.
The Budget also includes plans to invest £11 million in creating technology hubs in Manchester, Leeds and Sheffield.
The proposed sites will offer extra working space, meeting spaces and educational resources available for entrepreneurs working in the digital sector.
The income tax personal allowance is to rise to £10,800 next year and £11,000 the year after, making the typical working taxpayer £900 a year better off and cutting tax for 27 million people.
There will be an above-inflation rise in the threshold for the 40p income tax rate from £42,385 this year to £43,300 by 2017-18. The transferable tax allowance for married couples is to rise to £1,100. The share of income tax paid by the top one per cent of earners is projected to rise from 25 per cent in 2010 to more than 27 per cent this year, while the lower-paid 50 per cent pay a smaller proportion than under Labour.
Employers’ national insurance for under-21s will be abolished from this April and for young apprentices from next April. Expect a “major review” of the business rates system and a reduction in the annual investment allowance, which will be set at a rate “much more generous” than £25,000.
Class Two national insurance contributions for the self-employed are to be abolished in the next Parliament. The annual tax return will be abolished altogether, replaced by online systems.
Tax rules are to be tightened to prevent contrived loss arrangements, use of foreign branches to reclaim VAT, and ensure entrepreneurs’ relief is only available to those selling genuine stakes in businesses.
Chancellor George Osborne has announced that £2 million will be put towards commemorating the anniversaries of the battles of Agincourt and Waterloo. He revealed that £1m each will spent on marking 600 years passing since the 1415 Henry V-led English victory over France at the Battle of Agincourt, and Napoleon’s loss in 1815. Announcing the plans, Mr Osborne referred to Shakespeare celebrating the Agincourt win as a “victory secured by a ‘band of brothers’.” He continued: “It is also when a strong leader defeated an ill-judged alliance between the champion of a united Europe and a renegade force of Scottish nationalists.”
George Osborne has announced a consultation to examine a tax break for local newspapers, saying they are a “vital part of community life”.
The UK government will consider whether to introduce a business rates relief for local newspapers in England, the Chancellor said.
Mr Osborne said: “Local newspapers are a vital part of community life – but they’ve had a tough time in recent years – so today we announce a consultation on how we can provide them with tax support.”
Johnston Press chief executive Ashley Highfield said: “We are delighted the Chancellor has recognised the crucial role local newspapers play in communities across the country.
“We hope today’s announcement will help our industry continue to thrive.”
Scottish Newspaper Society director John McLellan said: “This is obviously very good news for our colleagues south of the Border, but the conditions which apply there are similar to those in Scotland and we hope the Scottish Government will also undertake a review of the way in which Scotland’s local newspaper publishers are taxed.”
A Scottish Government spokesman said: “The Scottish Government will monitor the debate around the UK government’s consultation, reflecting feedback from across business in Scotland.”
From 6 April, people aged 55 and over will be able to use their defined contribution pension pot like a bank account, taking money out as they wish, subject to their marginal rate of income tax in that year.
Currently, people wanting to sell their annuity face a 55 per cent tax charge, or as much as 70 per cent in some cases. The government plans to remove the charge so people are taxed only at their marginal rate. Under plans, they will be able to sell the income they receive from their annuity if they find a buyer, without unwinding the contract. The annuity provider continues to make payouts, but these will be reassigned to the annuity buyer.
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