The UK Budget 2011 has been announced by chancellor George Osborne, bringing in a raft of new measures that the coalition hopes will boost the UK eceomomy and help families struggling with their finances.
Amoung the Budget 2011 announcements are changes to personal tax allowance, cuts to fuel duty and help for first-time house buyers. There will be no new tax increase on alcohol or tobacco.
Budget 2011: Income tax
- Personal tax will not increase.
- Personal tax allowance – the amount people can earn tax free – will rise £630 to £8,015 in April 2012. A move that has been expected.
- Consultations will take place on whether to merge income tax and National Insurance.
- Non-domiciled taxpayers will see their tax charges increase. The last government introduced a £30,000 charge for those who had lived here for seven years. Mr Osborne said he was increasing the charge to £50,000 for non-doms who have been in the country for 12 years.
- 50% top rate of tax will remain but there will be a review of how much it raises.
- Direct tax rates will be indexed to Consumer Price Index from 2012.
Budget 2011: ‘Sin taxes’ – Alcohol, cigarette and fuel duties
- There will be no new tax increase on alcohol or tobacco.
- Tobacco duty rates will increase by 2pc above inflation, as previously announced.
- Fuel duty will be cut by 1p per litre from 1800 today. Inflation rise in fuel duty planned for April will be delayed until 2012.
- Plans to switch air passenger duty from passengers to planes have been dropped. This year’s APD rise postponed for one year, and the Government will seek to impose the tax on private jets.
Budget 2011: Other taxes
- Council tax will be frozen or reduced this year in every English local authority.
- A 10% inheritance tax discount will be introduced for those leaving 10% of their estate to charity.
- A suggested rise in air passenger duty will be frozen.
- Private jet users will pay passenger duty for first time.
- There will be a clampdown on tax avoidance which hopes to raise £1bn this year.
Budget 2011: Housing
- A £250m fund has been created for first-time buyers under a shared-equity scheme.
- Support for Mortgage Interest scheme will be extended by one year to January 2013 in a bid to reduce mortgage arrears.
Budget 2011: Businesses
- Corporation Tax will be reduced by 2% from April 2011. The tax will then fall by 1% for the next three years, reaching 23%. The Bank Levy rate will be adjusted to offset the effect of Corporation Tax reduction on banks.
- 43 tax reliefs will be scrapped as part of a simplification of the tax code.
- For the next three years, no new regulation will be imposed on firms with fewer than 10 staff.
- Small business rate relief holiday extended by one year to October 2012, at a cost of £370m.
- From April 6, the Entrepreneurs Relief scheme will be doubled to £10m. 21 “enterprise zones” will be created in England, backed by tax incentives.
Budget 2011: The UK economy
- The growth forecast for 2011 has been downgraded from 2.1% to 1.7%. The forecast for 2012 is also down1% from more optimistic estimates.
- Inflation will remain between 4% and 5% in 2011, falling to 2.5% in 2012.
Budget 2011: Green spending
- A Green Investment Bank has been set up with an additional £2bn, to start operation in 2012.
- The UK will introduce a carbon price floor for the power sector, becoming the first country to do so.
- A climate change levy discount on electricity for customers signing up to climate change agreements will rise.
Budget 2011: Jobs and training
- Funding will be given to 12 further university technical colleges.
- 40,000 new apprenticeships will be created for young people out of work.
- 100,000 new work experience placements will be funded.