This year’s Budget and the key areas of change.
A summary of the budget.
Income Tax
No personal tax increases
Personal allowance will rise by a further £630 to £8,015 in April 2012
The government will consult on a long term plan to merge Income Tax and National Insurance
The 50% top rate of tax will remain in place; however a review of its effectiveness will take place
Council tax
Council tax will be reduced or at least frozen for every English council this year
Other taxes
Those people who leave 10% of their estate to charity will receive a 10% inheritance tax discount
The proposed rise in air passenger duty will be frozen this year
Users of private jets will be forced to pay duty
A levy of up to £50,000 will be applied to ‘non doms’ who have been resident in the UK for 12 years or more
The administration of gift aid will be reformed
Business
Corporation tax will be cut by 2% in April this year, not by the 1% that had previously been announced. It will be reduced by a further 1% for each of the next three years taking it to 23%
The bank levy will be altered to ensure that banks do not pay less tax as a result
43 tax reliefs will be scrapped as part of a simplification of the system
There will be a freeze on new regulations for firms with less than 10 years
New rules will be introduced to require planners to prioritise growth and jobs when making decisions
21 ‘enterprise zones’ to be created in England
An extra 40,000 apprenticeships will be created for young people and there will be additional funding for 100,000 new work experience placements
The new Green Investment Bank, due to launch in 2012, will receive an extra £2bn of funding
Entrepreneur’s relief will be doubled from £5m to £10m
Pensions
The government accepts the findings of the Hutton review of public sector pension contributions
The long term aim of a flat rate State Pension of £140 per week will not apply to current pensioners
The government is also going to devise a way in which the state pension age rises automatically in line with increases in longevity
Fuel and road users
Duty to be cut by 1p per litre from 18.00 GMT today
Annual 1p above inflation fuel escalator to be scrapped until 2015
These measures will be paid for by £2bn of extra taxes on North Sea oil
VAT on fuel will remain the same
Road tax will rise in line with inflation; however it will be frozen for HGVs
Cigarette and alcohol duties
No additional changes to duty on alcohol have been announced
Rates of duty on tobacco will rise by 2% above inflation
Housing
A government backed shared equity scheme will be introduced to help 10,000 first time buyers to purchase homes
