The Chancellor has concluded his Budget speech. We are now in the process of updating our Budget Report and putting together a series of news articles.
However, the headline news from the Chancellor’s statement is:
Economy
Budget to set out road from rescue to reform and recovery.
Office for Budget Responsibility forecast revised down to 1.7 per cent for 2011; growth forecast to be 2.5 per cent in 2012, 2.9 per cent in 2013, 2.9 per cent in 2014 and 2.8 per cent in 2015.
Inflation expected to hold at between 4 per cent and 5 per cent this year before dropping to 2.5 per cent next year and to 2 per cent in two years’ time.
Borrowing this year to be £146 billion, below target.
Borrowing will fall to £122 billion next year before reaching £29 billion in 2015/16.
National debt forecast to be 60 per cent of national income this year, up to 71 per cent in 2012.
Taxes
Plans to make UK tax system ‘fit for the modern age’.
Corporation tax to be reduced by 2 per cent this year rather than 1 per cent, reducing to 23 per cent over the next three years.
43 tax reliefs to be abolished.
Government to consult on merging income tax and national insurance contributions.
Entrepreneurs’ relief doubling to £10 million.
£50,000 charge for non-doms living in UK for 12 years.
50 per cent tax rate described as a temporary measure.
Personal income tax allowance to rise from £7,475 by £630 to £8,105 April 2012, taking 1.1 million people out of the income tax system.
Gift Aid limits to rise from £500 to £2,500.
Inheritance Tax to be cut for people who leave 10 per cent of their estates to charity.
Fuel duty to be cut by 1p as from tonight, planned rise for April to be dropped and annual fuel escalator to be scrapped until 2015.
Fuel duty stabiliser to be introduced.
Business
Three year moratorium on domestic regulations for small firms.
Regulations costing businesses £330 million to be scrapped.
Small companies research and development tax credit to rise to 200 per cent in April and to 250 per cent next year.
Income tax relief on Enterprise Investment Scheme to increase from 20 per cent to 30 per cent as from April.
Small business rate relief holiday to be extended for a year to October 2012.
21 new enterprise zones to be set up, not ten as previously reported.
£100 million more to be spent on science facilities.
Green Bank to be set up in 2012 with £3 billion not £1 billion of funding.
Green taxes to increase as a proportion of the overall tax take.
40,000 more apprenticeship places to be available for unemployed young people.
Pensions
Single-tier state pension worth £140 a week to be introduced over time but not affecting current pensioners.
State retirement age to be increased regularly according to a set mechanism.
