The Chancellor’s Budget 2015

On Wednesday 18th March, fifty days ahead of the general election, the Chancellor George Osborne delivered his final Budget, and as he revealed the policies, he described Britain as the “Comeback Country”

“Today I report on a Britain that is growing, creating jobs and paying its way” – Chancellor George Osborne

A certain number of policies refer to, and will have an impact on, the small business community and we have summarised the main points below.

 
Growth and Economics:
• The economy is forecast to grow 2.5% in 2015 (compared to the 2.1% predicted a year ago), 2.3% for the next three years and then 2.4% in 2019.
• Inflation is forecast to fall to 0.2% this year.
• George Osborne said the UK’s economy could become bigger than Germany’s within the next 15 years – making it the biggest in Europe.

 
Borrowing and Spending:
• Debt as a percentage of GDP will fall in 2015-2016 for the first time since 2001 – it will be 80.4% in 2014-2015 and 80.2% in 2015-2016 and by 2019-2020 it will fall to 71.6%.
• Borrowing is forecast to fall from £97.5bn in 2013-2014, to £90.2bn in 2014-2015, and is expected to continue to fall each year before reaching a £5.2bn surplus in 2018-2019.
• £30bn worth of savings will be made – £13bn from government departments, £12bn from the welfare budget and £5bn from tax avoidance and evasion.

 
Jobs and Business:
• When the coalition started, unemployment was 8%, during this government it went as high as 8.6% and it is now the lowest in 6 years at 5.7%
• Unemployment will fall from 5.7% now, to 5.3% at the end of 2015
• 20p rise in National Minimum Wage takes effect in October and Osborne has claimed that it will be above £8 by 2020.
• North Sea oil companies supplementary charge will be cut from 30% to 20% and petroleum revenue tax will fall from 50% to 35%.
• A target of achieving 100 Mbps broadband download speeds across the UK as well as improving 4G and free WiFi coverage.

 
Tax:
• Personal tax-free allowance will rise from £10,600 to £10,800 in 2016-2017 and will reach £11,000 in 2017-2018.
• 40p income tax rate threshold will be raised above inflation to £43,300 in 2017-2018.
• Corporation tax cut to 20% from next year
• Closing tax loopholes will raise £3.1bn
• Annual paper tax returns will be replaced by new digital system that allows tax to be paid anytime throughout the year.

 
Pensions and Savings:
• The pension lifetime allowance will be cut from £1.25m to £1m – it will affect less than 4% of people and will save £600m a year.
• Law will be changed to allow five million pensioners the access to their pensions early and to change them without being taxed.
• 95% of savers won’t be taxed on the first £1,000 of their savings.
• New ‘Help to Buy’ ISA for first-time buyers – for every £200 saved, the government contributes £50.
• Other ISAs will be made more flexible to allow savers to keep tax benefits when they take money out and put them in.

 
Banks:
• Plans to raise the annual bank levy from 0.156% to 0.21% – generating £900m a year
• Selling £9bn worth of Lloyds shares and £13bn of UK Assest Resolution mortgages.

 

More information regarding the Chancellor’s budget can be found here:

And to join the conversation on twitter, see #Budget2015

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