Photograph courtesy of the Cabinet Office
A summary of the main points of the 2014 Budget as given by Chancellor of the Exchequer George Osborne earlier today
State of the economy
- GDP forecast to grow by 2.7% this year, 2.3% in 2015, 2.6% in 2016 and 2017, and 2.5% in 2018.
- Deficit forecast to be 6.6% of GDP this year, 5.5% in 2014-2015, 4.7% in 2017-18, with a surplus of 0.2% by 2018-19.
- Borrowing forecast to be £108 billion this year, £95bn next year, with a surplus of nearly £5 billion by 2018-19.
Business
- Interest rates on loans to UK businesses to promote expotes cut by a third, with money available for loans increased to £3 billion.
- Three year extension for business rate discounts and enhanced capital allowances in enterprise zones.
Tax
- Tax-free personal allowance for income tax will be raised from £10,000 to £10,500 in April 2015.
- Threshold for top 40% tax rate will raise from £41,450 to £41,865 in April, and then to £42,285 in 2015.
- Maximum tax-free childcare support raised to £2,000 per year for each child
- Inheritance tax waived for members of emergency services who give doing their job.
- VAT waived on fuel for air ambulances and inshore rescue boats.
- All long-haul flights to have lower air duty rate currently only charged on UK-US flights.
Pensions and Savings
- Pensioners no longer required to buy annuity, making it easier and cheaper for savers to withdraw cash directly from their pension funds
- Taxable part of pension pot taken as cash on retirement to be charged at standard tax rate, reduced from 55%
- Total pension savings that people can take out as a lump sum increased to £30,000.
- Pensioner Bond for over-65s launched with possible rates of 4% for three year bond to be launched in January 2015.
- 10p starting rate of tax on savings income to be abolished.
- Annual tax-free savings limit of £15,000 from 1 July after merging of cash and shares Isas.
- Cap on premium bonds raised form £30,000 to £40,000 in June, and rising to £50,000 in 2015.
Housing
- New “garden city” to be developed at Ebbsfleet in Kent
- Help to Buy scheme for new-builds extended until 2020, expected to help around 120,000 first-time buyers
- £140 million of new funding to repair flood defences that have suffered damage in the recent severe flooding
- £200 million to establish a potholes challenge fund
Energy and Fuel
- £18 per ton cap on carbon price support (green tax), estimated to save families £15 per year
- Planned September fuel duty rise scrapped.
Alcohol, tobacco and gambling
- 1p a pint cut from beer duty
- Duty on spirits and cider frozen
- Tobacco duty to rise with ongoing escalator at 2% above inflation
- Beer duty cut by 1p a pint
- Duty on Bingo cut from 20% to 10%.
- Duty on fixed-odds betting terminals increased to 25%.
