Budget 2012 Overview
Budget 2012 Overview

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.
Duty
  • 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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