Budget 2012 Overview

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July 15th 2020
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Budget 2012 Overview

Read our full breakdown and overview of the 2012 UK Budget

The Treasury has now published the full breakdown of Chancellor George Osborne's Budget report for 2012.

The OOTLAR gives you a by department breakdown of rates, allowances and other figures.

Income Tax changes

Allowances and bands for the 2013/2014 tax year have been decided, with the following changes:

  • The additional rate/top rate of income tax will be cut from 50 percent to 45 percent, starting 6th April 2013.
  • Age related allowances are to be phased out by making them only available to people born before 5 April 1948, rather than by age. It is a move to make all age groups have the same personal allowance - aiming at a unified £10,000 personal allowance in the coming years presumably.
  • Personal Allowance for individuals born after 5 April 1948 to increase by £1,100 to £9,205.
  • The starting point at which higher rate tax is paid will be decreased by £2,125 to £32,245 - it is currently £34,370.
  • The point at which you start to pay the lower percentage in National Insurance Contributions, the Upper Earnings Limits, will be reduced to £41,450.
  • Tax reliefs are capped at 25 percent of gross income if total claims exceed £50,000.
Child Benefit changes
  • Once household income exceed a new £50,000 limit, Child Benefit entitlement will be reduced at a rate of 1 percent for every £100 over the limit. Households with an income at or over £60,000 will no longer be entitled to Child Benefit.
The Economy - facts and figures
  • Minor growth revision by the OBR from 0.7 percent to 0.8 percent.
  • Forecast for the future years is 2 percent, 2.7 percent and 3 percent for 2013, 2014 and 2015 respectively.
  • Forecast for the EU zone now in negative growth (-0.3 percent) from previous outlook of 0.8 percent growth.
  • Inflation targeted at 1.9 percent from 2013 - currently level at 2.8 percent.
  • Sunday trading laws get an eight week exception for the Olympics, starting from 22 July 2012.
Business - Taxes and Schemes
  • Starting this April 2012, the Main Rate of Corporation Tax will be reduced to 24 percent and it is scheduled to fall to 22 percent by 2014.
  • The levy on banks to be increased in 2013 to 0.105 percent. This is to override any potential benefit to banks from the above Corporation Tax cuts.
  • Small businesses with a turnover of up to £77,000 will have a simpler tax system.
  • Tax reliefs proposed for businesses in the media sectors of animation, video games and top-end television production.
Armed Forces
  • Operational expenditure in Afghanistan below expectation with forecasts of £2.4 billion below budget.
  • The £2.4 billion saved will be used to provide £100 million in accommodation improvements and doubled welfare grants and council tax reliefs for military personnel.
  • A 5 percent, above inflation, rise in tobacco duty - around 37 pence per pack of 20 cigarettes - effective 6pm today (20 March 2012).
  • VED rises by inflation, but fuel duty frozen. Hauliers VED also frozen.
  • A new fair fuel stabiliser to prevent sharp rises in fuel prices if per barrel costs of oil drop below 75 dollars.
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