George Osborne says his 2012 Budget will “reward work”, support working families and ‘unashamedly backs business’ but warns of need to continue his austerity drive in face of sluggish growth.
Budget 2012 Key Points:
Automatic review of state pension age to ensure it keeps pace with increasing lifespans. New single-tier state pension for future pensioners to be set at about £140 and based on contributions
Duty on all tobacco products to rise by 5% above inflation from 18:00 today – the equivalent of 37p on a packet of cigarettes. No change to alcohol duty. New duty on gaming machines at a standard rate of 20% and a lower rate for low-prize machines of 5% of net takings. No change to existing plans on fuel duty (however, please note that plans to increase Fuel by 3p from August still stand). Vehicle excise duty to rise by inflation, but frozen for road hauliers
Good news for young entrepreneurs Government considering enterprise loans for young people to start their own business.
Corporation tax cut to 24% from next month. By 2014 it will fall to 22%
From midnight, new stamp duty level of 7% for homes worth more than £2m. Any such homes bought through companies will pay 15%. Extra funding to help construction firms building new homes
CHILD BENEFIT Will be phased out when someone in a houshold has an income of more than £50,000. It will fall by 1% for every £100 earned over £50,000. Only those earning more than £60,000 will lose the entirety of the benefit
From April 2013, the 50p top rate of tax will be cut to 45p. Personal income tax allowance will be raised to £9,205 from April 2013, making people £220 a year better off. However, those aged 65 and over will no longer be entitled to the higher rate of personal allowance leaving these individuals paying around £260 more in tax per year.
It should also be noted that around 300,000 workers woll be pulled into the 40% tax bracket. Currently workers can earn £42.475 before paing tax at 40%, this limit is now to be reduced to £41,450 – This was not announced in Mr Osborne’s speech but was included in the budget document.