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- Income tax: 50p tax
rate for anyone earning more than £150,000 a year will be reduced to
45p, effective from April 2013. George Osborne said the rate had damaged "Britain’s competitiveness" and that “no Chancellor
can justify a tax rate that damaged the economy and raised next to
HMRC calculates the 50p tax rate raised £1bn – a third of estimates when brought in by Labour.
- Personal allowance: Threshold for tax-free earnings will rise to £9,205 from April 2013 – up £1,100 on the current allowance. This will put £220 a year into the pockets of millions of Britons.
- Corporation tax: George Osborne announced corporation tax will be cut by 1% immediately, taking the tax to 24%. This will decrease to 22% by April 2014. The Chancellor said that this is the “biggest sustained reduction in a generation” and that the move will be "an advertisement” for business in Britain.
- Stamp duty: The Chancellor said that avoidance of stamp duty is a “major source of abuse” and in turn announced that Stamp Duty Land Tax charge on residential properties over £2m will rise to 7% from midnight and such homes bought inside a corporate envelope will see tax of 15%.
- Tobacco: The Chancellor announced tax on cigarettes will rise to 5% above inflation - adding 37p to the price of each packet sold from 6pm tonight.
- Gambling: Osborne said that slot and fruit machines would see new taxes – with a standard rate of 20% and a lower rate for low-prize machines of 5% of net takings.
- Alcohol and Fuel: No immediate changes to taxation announced. But Previously announced plans mean the price of a pint will still rise between 5p and 10p from next week.
- Additional: Osborne said that the government were “pressing forward” with plans to integrate operation of income tax and national insurance – a consultation on that will be published in April.
- Where your money goes: Osborne confirmed that everyone would receive a personal tax statement explaining what they have paid and where this money has been spent – ie how much of your money has gone to things like education, health, benefits and the like.
Tax breaks for industry: The 2012 Budget contained tax breaks and support for several UK based industries, including TV production companies, animators, video games producers and more industrial sectors like aviation and pharmaceuticals.
- Child benefits: The Chancellor confirmed that 90% of all families will remain eligible for child benefits as the cutoff threshold will activate when someone in the household is earning more than £60,000. These benefits will gradually decrease 1% for every extra £100 earned over £50,000.
- Pensions: There will be a single tier pension for future pensioners, set above the means test at an approximate £140 a week. Osborne said that this change would not cost more than the current systems and it would be based on contributions.
State of the UK economy
- The Office of Budget Responsibility [OBR] expects UK economy to avoid recession as the outlook is “broadly unchanged” since last November’s report.
- The OBR is revising up the growth forecast from 0.1% to 0.8 % this year, then to 2% in 2013, 2.7% in 2014 and 3% in 2015/16.
Deficit and borrowing
- Osborne confirmed that the deficit is falling from the 11% level it was at when the coalition government came into power and is forecast to reach 7.6% in 2013.
Borrowing this year is to amount to £126bn, a billion less than Osborne forecast in the Autumn statement. This figure is forecasted at £120bn in 2013 (unchanged) and £98bn 2013-14.
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