So it was a day that saw George Osborne join Twitter, we learnt that “fracking is the way forward” and a frog in the throat can see the market rise by 15 basis points.
Apart from that here are our key notes from todays Budget.
As always more details will emerge over the coming weeks and we will provide further in depth detail in our news and blog articles.
Economic growth, the deficit and debt
So it seems Mark Carney will have his work cut out for him come July, here a few key notes from the Budget on the UK’s Economic Growth and the current outlook…
- No ‘triple dip’ is expected.
- Office for Budget Responsibility (OBR) predicts growth in the UK of 0.6 per cent in 2013, 1.8 per cent in 2014, 2.3 per cent in 2015, 2.7 per cent in 2016 and 2.8 per cent in 2018.That compares to previous OBR forecasts from the Autumn Statement in December for growth of 1.2 per cent in 2013, 2 per cent in 2014, 2.3 per cent in 2015, 2.7 per cent in 2016 and 2.8 per cent in 2017.
- OBR revises up forecast for employment, with 600,000 more jobs expected in 2013 than this time last year.
- The OBR forecasts UK public borrowing of £108billion next year, £97billion in 2014/15, then £87billion, £61billion and £42billion. The OBR had previously expected public borrowing to hit £108billion this year, then £99billion, £88billion, £73billion and £49billion in later years, reaching £31billion in 2017/18. These had assumed receipts from an auction of 4G mobile frequencies of £4billion, and the transfer from the Bank of England of proceeds from the Asset Purchase Facility of £11.5billion.
- New powers and flexibility for the Bank of England, which keeps its 2 per cent inflation target.
Personal tax
The rise in Personal Allowance should be seen as a positive, and will help those on lower incomes. Other taxation changes include…
- Rise in personal allowance brought forward to 2014, meaning no income tax on the first £10,000 of earnings.
- The personal allowance is currently £8,105 and will rise to £9,440 on 6th April 2013.
- Capital Gains Tax holiday to be extended.
- Help for employees includes more generous shareholder status, CGT relief for sales of business to workers, tax help to return to work after sickness and a doubling to £10,000 for tax free loans for commuters’ season tickets.
- Large new package of measures on tax avoidance and evasion to bring in £3billion.
Pensions and Investments
It is predicted every year but we have seen no significant changes to pension tax relief or the tax free lump sum…
- Flat rate pension worth £144 a week to be brought forward to 2016
- The annual allowance for pensions is current £50,000 and this will reduce to £40,000 from 6th April 2014.
- Abolition of stamp duty on shares traded on growth markets like AIM.
- It will be possible to transfer Child Trust Funds (CTF’s) to Junior ISA following the consultation period.
- Help for Equitable Life policy holders extended to those who bought with-profits annuities before 1992, with payments of £5,000 and extra £5,000 for those on lowest incomes.
Welfare and benefits
Some cynics may say they have taken away the recently introduced “means tested Child Benefit” only to introduce the new child care voucher scheme…
- Tax free child care vouchers worth £1,200 per child and increased support for families with children on universal credit.
- Cap-on social care costs to come in in 2017 and protect savings above £72,000, with the threshold for means tested help raised from £23,000 to £118,000.
Mortgages
Some good news for the housing market, but perhaps looking at Stamp Duty may have had more impact…
- New Help-to-Buy scheme for those struggling to find mortgage deposits will include £3.5 billion for shared equity loans, and a Government interest-free loan worth 20 per cent of the value of a new build house.
- New mortgage guarantee, sufficient to support £130billion worth of loans, to help people who cannot afford a big deposit.
Fuel duty
- September’s planned fuel duty rise has been scrapped.
Beer tax
- Planned 3p rise in beer duty tax scrapped and replaced by a 1p cut in duty on a pint of beer. Beer duty escalator scrapped, but planned rises for all other alcohol duties maintained.
Business tax
- New Employment Allowance will take the first £2,000 off the employer National Insurance bill of every company in the country.
- Corporation tax cut to 20 per cent in 2015. Small company and main rates of corporation tax to be merged at 20p. Bank levy rate to increase to 0.142 per cent next year to off-set reductions in corporate tax