Budget 2011
Chancellor of the Exchequer George Osborne delivered his Budget on March 23rd and the key points are contained below.
The very difficult economic picture saw growth forecasts reduced although forecast borrowing for the year also fell slightly.
Against this backdrop and with little room to manoeuver the Budget still managed to contain some surprises, in particular an actual cut in fuel duty. It had been widely predicted that planned increases would be shelved but Mr Osborne announced an increase in tax on North Sea oil companies which would fund the fuel duty reduction.
The housing market was given a slight boost by the introduction of the FirstBuy scheme, basically a reworked shared equity scheme to enable First Time Buyers to buy new homes with a reduced deposit requirement. Naturally the house building industry was pleased with the £250m allocated.
The full HM Treasury Budget documents can be found here:
UK ECONOMY
2011 growth forecast downgraded from 2.1% to 1.7%
2012 forecast also down from 2.6% to 2.5%
Inflation set to remain between 4% and 5% in 2011, falling to 2.5% in 2012
BORROWING
Forecast borrowing of £146bn this year, £2.5bn lower than anticipated
Borrowing to fall to £122bn next year, dropping to £29bn by 2015-16
National debt forecast to be 60% of national income this year, rising to 71% in 2012 before falling to 69% by 2015
INCOME TAX
No personal tax increases
Personal tax allowance to rise a further £630 to £8,015 in April 2012
Consultation on long-term plan to merge income tax and National Insurance
50% top rate of tax to remain but review of how much it raises
Direct tax rates to be indexed to Consumer Price Index from 2012
OTHER TAXES AND ALLOWANCES
Council tax to be frozen or reduced this year in every English council 10% inheritance tax discount for those leaving 10% of estate to charity Rise in air passenger duty to be frozen this year
Private jet users to pay passenger duty for first time
Inflation rise in road tax but duty for HGVs frozen
Levy of up to £50,000 on so-called "non-doms" resident in the UK for 12 years
Support for families in the south-west of England with water bills
Tax avoidance clampdown to raise £1bn this year
Supplementary tax on North Sea oil firms to rise from 20% to 32%
HOUSING
Government-backed shared equity scheme to help 10,000 first-time buyers to purchase properties.
The Firstbuy scheme would see the government and house builders offer loan help for first-time buyers purchasing a newly-built home.
Buyers must save a deposit worth 5% of their property's value, with the government and housebuilders putting up 10% each through an equity loan, enabling people to qualify for 75% loan-to-value mortgage.
The equity loan would be interest-free for the first five years, with interest charged at 1.75% in year six, and at inflation plus 1% thereafter.
HELP FOR BUSINESS
Corporation tax to be cut by 2% in April, not 1% as previously planned
Tax to cut by 1% in each of the next three years, reducing it to 23%
Bank levy to be adjusted so banks do not pay less tax as a result
43 tax reliefs to be scrapped as part of simplification of tax code
No new regulation on firms with fewer than 10 staff for three years
Business rate relief holiday for small firms extended for another year
New rules to require planners to prioritise growth and jobs
£100m funding for science facilities
21 "enterprise zones" to be created in England, backed by tax incentives
Reform of gift aid administration for charitable donations
JOBS AND SKILLS
Funding for 12 further university technical colleges
Extra 40,000 apprenticeships for young people out of work
Funding for 100,000 new work experience placements
PENSIONS
Accepts Hutton review of reform of public sector pension contributions
Long-term aim for £140 a week flat-rate state pension - not to apply to current pensioners
TRANSPORT
£100m extra for councils to repair potholes in England
£200m support for regional railways in England
GREEN MEASURES
£2bn extra funding for Green Investment Bank - to launch in 2012
UK to introduce a carbon price floor for the power sector
FUEL DUTY
Fuel duty to be cut by 1p per litre from 1800 GMT on 23rd March
Planned inflation rise in fuel duty due in April to be delayed until 2012
Annual 1p above inflation "fuel escalator" rise scrapped until 2015
Measures to be paid for by £2bn extra taxes on North Sea oil firms
VAT on fuel will not be reduced
CIGARETTE & ALCOHOL DUTIES
No additional changes to alcohol duty rates but 2% above inflation rise in excise duties for wine and beer to go ahead
Tobacco duty rates up by 2% above inflation, duty regime to be reformed
