Here are the main points of Chancellor George Osborne’s Budget.
TAXThe income tax personal allowance is to rise to £10,800 next year and £11,000 the year after, making typical working taxpayer £900 a year better off and cutting tax for 27 million people.
Above-inflation rise in threshold for 40p income tax rate from £42,385 this year to £43,300 by 2017/18.
The transferable tax allowance for married couples to rise to £1,100.
The share of income tax paid by the top 1% of earners is projected to rise from 25% in 2010 to more than 27% this year, while lower-paid 50% of earners pay a smaller proportion than under Labour.
Employers’ national insurance for under-21s will be abolished from this April and for young apprentices from next April.
A “major review” of the business rates system and the reduction in the annual investment allowance to be set at a rate “much more generous” than £25,000.Guide to matters devolved to the Scottish GovernmentClass Two national insurance contributions for the self-employed to be abolished in next Parliament.
The annual tax return will be abolished altogether, replaced by digital and online systems.
A penny a pint will be knocked off beer duty, cider duty will be cut by 2% and duty on Scotch whisky and other spirits also cut by 2%. Wine duty frozen and duties on tobacco and gaming also unchanged.
The fuel duty increase which was scheduled for September is cancelled.
The pension pot lifetime allowance to be reduced from £1.25 million to £1 million from next year, saving £600 million annually.
Government to legislate next week on diverted profits tax aimed at multinationals shifting profits offshore, and bring it into effect at the start of April.
Tax rules to be tightened to prevent contrived loss arrangements, use of foreign branches to reclaim VAT on overheads, clampdown on “umbrella companies” and ensure entrepreneurs relief is only available to those selling genuine stakes in businesses.
The measures on tax avoidance and evasion to raise £3.1 billion over the forecast period.
Review on the use of deeds of variation to avoid inheritance tax, to report by the autumn.
Bank levy raised to 0.21%, raising an additional £900 million a year, with banks to be barred from deducting compensation for mis-selling from their corporation tax bills. In total, new banking taxes to raise £5.3 billion across forecast period.
Reduced rate of increase in company car tax for low-emission vehicles – with other vehicle rates rising by 3% in 2019/20.
Introduction of “generous” tax allowance to stimulate investment in North Sea oil industry from start of April, with Government investing in new surveys of UK continental shelf.
Support totalling £1.3 billion for oil industry includes cut in petroleum revenue tax from 50% to 35% next year and in supplementary charge from 30% to 20%, backdated to January.PENSIONS AND SAVINGSLaw change to allow pensioners to access their annuities, with 55% tax charge abolished and tax applied at the marginal rate.
Annual savings limit for Isa increased to £15,240 and a new fully flexible Isa created.
A new Help To Buy Isa for first-time buyers allows the Government to top-up by £50 every £200 saved for a deposit.
A new personal savings allowance from April next year means first £1,000 of interest on savings will be tax-free.ECONOMY AND PUBLIC FINANCESOffice for Budget Responsibility confirms that, at 2.6% UK growth faster than any other major economy last year.
OBR revises forecast UK growth for 2015 upwards from 2.4% in Autumn Statement to 2.5% now. Forecast for 2016 revised upwards to 2.3%, then 2.3% in 2017 and 2018 and 2.4% in 2019.
OBR revises down growth in world economy, growth in world trade and the prospects for the eurozone.
OBR forecasts unemployment to fall to 5.3% this year.
Mr Osborne said that people are better off at the end of this parliament than five years ago, with GDP per capita up by 5% and real household disposable income higher in 2015 than 2010.
The average household is around £900 better off in 2015 than 2010, with living standards set to grow strongly every year until 2020, said Mr Osborne.
OBR revises down inflation forecast for this year to 0.2%, and revises it down for the following three years.
Welfare bills set to be an average of £3 billion lower each year than predicted in December, and interest charges on Government gilts £35 billion lower.
Treasury to sell at least a further £9 billion of Lloyds Bank shares in the coming year and launch sale of £13 billion of mortgage assets from Northern Rock and Bradford & Bingley.
Resources from bank sales, lower interest payments and lower welfare bills to be used to pay down the national debt.
Squeeze on public spending to end a year earlier than planned, so that in 2019/20 spending grows in line with the growth of the economy – bringing state spending as a share of national income to the same level as in 2000.
The Government has met its 2010 target to end this parliament with Britain’s national debt falling as a share of GDP.
Debt as a share of GDP falls from 80.4% in 2014/15 to 80.2% in 2015/16, then 79.8%, 77.8% and 74.8% in subsequent years before reaching 71.6% in 2019/20.
OBR confirms deficit is less than half of that inherited from the previous government, but at 5% this year “it’s still far too high and it must come down”.
Deficit forecasts from Autumn Statement revised downwards to 4% in 2015/16, 2% in 2016/17 and 0.6% in 2017/18. Budget surplus of 0.2% forecast for 2018/19 and 0.3% for 2019/20.
Borrowing forecast for this year revised downwards to £90.2 billion, then £75.3 billion in 2015/16, £39.4 billion, £12.8 billion in subsequent years – a total of £5 billion less borrowing than forecast in December.
Budget surplus of £5.2 billion forecast for 2018/19 and £7 billion for 2019/20.INVESTMENT AND SPENDINGFunding provided for “major expansion” of mental health services for children and those suffering from maternal mental illness.
A further £75 million from Libor fines paid by the banks to go to good causes.
Some £1 million will go to buy defibrillators for public places, including schools.
Additional money today to support the fight against terrorism.
The £15 million fund for church roof appeals will be trebled, and extension to £8,000 in automatic gift aid will benefit 6,500 small charities.
Government to provide £1 million to commemorate 600th anniversary of Agincourt.
Support for North of England includes transport strategy for the North, funds for Health North initiative and agreement of new city deal for West Yorkshire Combined Authority. Greater Manchester to be allowed to keep 100% of growth in local business rates.
Go-ahead for £60 million investment in the new Energy Research Accelerator in the Midlands, with new national energy catapult to be in Birmingham.
Support for automotive industry including investment of £100 million for driverless technology.
Transport investment of £7 billion in the South West, including new intercity rail franchise.
Introduction of the first 20 housing zones for construction and extension of eight enterprise zones across Britain, with new zones in Plymouth and Blackpool.
In Wales, negotiations opened on Swansea Bay tidal lagoon and Severn Crossing toll rates reduced from 2018.
Announcement of “more generous” tax credits for TV and film, expanded support for video games industry and new tax credit for orchestras.
A new horse race betting right, and a consultation on tax support for local newspapers.
Up to £600 million to clear new spectrum bands for auction to improve mobile networks.
Funding for wifi in public libraries and new national ambition for ultra-fast broadband to nearly all homes in the country.