closedownarrowexternal-linklogo-verticalmenu-barsearch Skip to main content

George Osborne’s 2011 Budget: key points for consumers

George Osborne 0480am

George Osborne is set to announce 2011’s Budget against a backdrop of inflation and global unrest. Image by altogetherfool via Flickr

The key points from George Osborne’s 2011 Budget and how they will affect your finances.

The economy

  • The growth forecast is down from 2.1% to 1.7% in 2011 and 2.6% to 2.5% in 2012.
  • The Office for Budget Responsibility (OBR) expects inflation to remain at 4-5% percent in 2011, but return to 2% by 2013.

Tax

  • 43 tax reliefs will be abolished.
  • The 50% tax rate will be reviewed.
  • There will be a consultation on the merging of National Insurance and Income Tax to try to simplify the tax system.
  • There will be a new measures to prevent tax avoidance.
  • Council Tax to be frozen or reduced.
  • From April 2012 the personal tax allowance will increase to £8,105, from £7,475.

Housing

  • There will be a £250 million commitment to help 10,000 first-time buyers buy new-build homes. This will be funded  by the bank levy.

Water

  • There will be public money to help people in the south-west with their water bills.

Energy

  • There will be incentives for investment in green energy, including an extra £2 billion for the Green Investment Bank and the UK will be the first country to introduce a carbon price floor for the energy industry.

Pensions

  • George Osborne would like to see a ‘single tier pension’ and there is a long-term aim to get to a £140 a week flat-rate state pension.

Pay

  • Public servants earning under £21,000 will get a ‘pay lift’ of £500.

Alcohol, tobacco and fuel duties

  • Tobacco duty to rise by 2% above inflation from 6pm tonight.
  • The tax on strong beer is to be increased, but the tax on low-alcohol beer will decrease, but there will be no additional changes.
  • The planned fuel duty increase of 1p above inflation is being scrapped, and fuel duty will be cut by 1p per litre from 6pm tonight.

Small business

  • From April 2011 Corporation Tax will be reduced by 2%.
  • There will efforts to reduce the weight of regulations on businesses – £350m of business regulation will be scrapped and there will be no new regulation on firms with fewer than 10 staff for three years.
  • 15% increase in credit for small businesses.
  • Business rate relief extended to October 2012.
  • From April 2011 Income Tax relief  will increase to 30%.
  • joyquig@hotmail.com

    As a senior citizen over the age of 65 my personal tax allowance has not been increased as has everyone elses. I also believe the winter fuel allowance has been cut by £50 leaving me worse off than I was before this budget.

  • Myer Cohen

    If the revenue merges national insurance and personal tax, will people who are 65 be assessed differently for tax as they do not pay national insurance after 65 years.

  • Myer Cohen

    Please notify me of follow up comments re my earlier email re tax & national insurance for senior citizens.
    THANK YOU.

Categories