The Chancellor of the Exchequer, George Osborne, delivered his final Budget before the General Election today with the economy at its healthiest state since before the financial crisis.
Under pressure not to deliver a Budget tainted by pre-election gimmicks and giveaways, the Budget inevitably had a political bias as the Chancellor set out his stall and asked voters to choose the future and make a critical choice to stick with the Conservatives.
Within this, the continued references to a Northern Powerhouse will be welcome news to businesses in the region, and following the success of the Growth Fund in supporting local businesses over the last year, additional measures were announced in this Budget. These include funding for a £11 million entrepreneurs hub in Sheffield, Manchester and Leeds and a £14 million Sports and Exercise Research Centre based in the Don Valley.
The headlines will inevitably focus on the death of the tax return to be replaced by a new digital account, but how this will work in practice is still to be revealed. The main announcements to note are:
• The annual investment allowance is meant to reduce to £25,000 from 1 January 2016 but the Chancellor has now committed to a higher figure than this.
• Pension simplification continues with a new market being developed for pension annuities and sales being taxed at marginal tax rates rather than 55%.
• The introduction of a new Help to Buy ISA where every £200 saved is added to by £50 by the Government.
• The abolition of the automatic deduction of income tax at 20% by Banks and Buildings Societies from April 2016 to be replaced by a new tax free amount of £1,000 for basic rate taxpayers.
• The tax-free personal allowance to rise to £10,600 from April 2015, to £10,800 from April 2016 and then rising to £11,000 the year after.
• As expected the rate of corporation tax reduces to 20% from 1 April 2015.
Only the next 50 days will tell whether the measures announced coupled with the positive economic outlook are sufficient in achieving electoral success for the Conservatives.
