Chancellor George Osborne has delivered his sixth budget, the last before the May general election. Here is an overview of the key points from his speech.

Economy

  • Economy grew 2.6% in 2014, lower than the 3% predicted.
  • Forecast to grow 2.5% in 2015, up from 2.4% predicted in December, followed by 2.3%, 2.3%, 2.3% and 2.4% in the next four years.
  • Inflation projected to fall to 0.2% in 2015
  • Employment at record levels with jobless rate expected to fall to 5.3% this year

Public finances

  • Additional £30bn savings needed in next Parliament
  • Borrowing forecast to falls from £97.5bn in 2013-14 to £90.2bn in 2014-15, £75.3bn in 2015-6, £39.4bn in 2016-7, £12.8bn in 2017-8 before reaching a £5.2bn surplus in 2018-9
  • Debt as a share of GDP projected to fall from 80.4% in 2014 to 80.2% in 2015-16 before falling in every year, reaching 71.6% in 2019-20
  • Public spending to continue to be squeezed until 2018-29 and then grow with inflation.
  • £13bn mortgage assets from Northern Rock and Bradford & Bingley to be sold

Business

  • Tax on “diverted profits” aimed at multinational firms “artificially” moving profits off-shore to come into effect in April
  • Extra £900m raised by increasing annual bank levy to 0.21%
  • Petroleum revenue tax to fall from 50% to 35% and supplementary charge on North Sea oil producers to be cut from 30% to 20%
  • New tax allowance to encourage investment in North Sea oil
  • Gift Aid limit for charities to be extended to £8,000

Personal Taxation

  • Tax-free personal allowance to rise from £10,600 in 2015-6 to £10,800 in 2016-7 and £11,000 in 2017-8
  • 40p tax threshold to rise by above inflation from £42,385 in 2014-5 to £43,300 in 2017-8
  • Annual paper tax returns to be abolished

Savings

  • Introduction of new personal savings allowance – First £1,000 interest on savings income to be tax free for basic rate taxpayers, and first £500 for top-rate taxpayers
  • ISA annual savings limit increased to £15,240

Pensions

  • Lifetime pension pot allowance to be reduced from £1.25m to £1m from 2016, saving £600m annually
  • Pensioners to be allowed to access their annuities, 55% tax charge axed and tax applied at the marginal rate

Alcohol, tobacco, gambling, and fuel

  • Beer duty cut by 1p and cider by 2p
  • Scotch whisky excise duty cut by 2%
  • Gambling taxes unchanged
  • Tobacco duty set to rise at 2% above inflation (around 16p per 20 pack of cigarettes)
  • Petrol duty frozen – cancelling planned September increase

Infrastructure

  • Up to £600m to clear new spectrum bands for auction to improve mobile network coverage and speeds
  • New inter-city rail franchise for south west of England
  • Toll for Severn river crossings to be reduced from 2018
  • Consultation on £1bn “tidal lagoon” in Swansea Bay to generate green energy

Military

  • Further £75m from Libor-fixing fines to go to charities for regiments which fought in Afghanistan
  • £25m to support army veterans, including nuclear test veterans
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1 Comment

  1. Terence Hale on

    Hi,
    “Budget 2015:”. “Please sir I want some more”. Mr. Osborne gave a three bottles of port wine budget where only the day after with a hangover reality knock on the door. Without a social conscience he did his job. Scotland and the north came short and by confusing everybody demonstrating that not one person in Britain understand the tax system. The Sheriff of Nottingham is pleased.