The key points from George Osborne’s 2011 Budget and how they will affect your finances.
- 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.
- 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.
- 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.
- There will be public money to help people in the south-west with their water bills.
- 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.
- 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.
- 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.
- 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%.