In his eighth Budget as chancellor, George Osborne announced a new “Lifetime Isa”, reduced corporation tax, and raised personal tax thresholds. Here are the main points of his Budget speech.
George Osborne ambitiously claimed that by 2019-20 the budget would be in surplus by £10.4bn. The following year would see an £11bn surplus. To help this along, he announced a further £3.5bn would be cut from departmental spending
As expected, Osborne introduced measures to hit multinationals who squirrel their profits away offshore. He hopes to raise £8bn from these measures.
At the other end of the scale, he introduced two tax breaks for “micro entrepreneurs”. You can now earn up to £1,000 without paying tax from selling goods or services. That’s good news for e-Bay sellers and the “sharing economy”.
Class 2 National Insurance contributions will be abolished for the self employed, and there will be new thresholds for small business rate relief. There will be tax breaks introduced for the North Sea oil industry, and corporation tax will fall to 17% by April 2020.
The tax-free personal allowance will be extended to £11,500 from April next year, and the higher-rate threshold will rise to £45,000.
The rate of capital gains tax falls from 28% to 20%, and from 18% to 10% for basic rate taxpayers. But not for gains on residential property (but not your main home) – there will be a surcharge on that.
There was good news for savers, especially younger savers – the Isa limit will rise to £20,000 From April next year. But the big news is the introduction of a new “Lifetime Isa” for the under-40s. You’ll be allowed to save £4,000 a year, which the government will top up by 25%. So for every £4 you save, they will chip a further £1.
All schools in England will be Academies or on their way to being academies by 2020. And there would be maths for all up to the age of 18.
As a result of a sugar tax to tackle obesity, £520m will be available to fund sport in primary schools. And up to a quarter of secondary schools will get funding to increase the length of the school day.
Fuel tax is frozen, as is tax on beer, cider and spirits. Other alcohol taxes rise by inflation. Tobacco tax will go up by between 2% ad 3%.
£700m will go to improving flood defences, paid for by a 0.5% rise in insurance tax.
The go- ahead was given to the HS3 high-speed rail link between Manchester and Leeds, as well as a road tunnel under the Pennines between Manchester and Sheffield. London’s north/south Crossrail 2 project was given the green light, and tolls are to be abolished on the Severn Crossing.
There is to be an extension of elected mayors, with counties and southern cities being given mayors. East Anglia is to be given a combined authority with an elected mayor, as will the West of England, and Greater Lincolnshire.