Budget for an ‘aspiration nation’
The central mantra of George Osborne’s fourth budget was a vow to “tackle the economy’s problems head on” while helping “those who want to work hard and get on”.
Largely fiscally neutral, it was “a budget for an aspiration nation” that will help the UK economy grow by “tax cuts which will be paid for not borrowed”.
Corporation tax will fall to 21% for the financial year commencing 1 April 2014 and 20% for the financial year commencing 1 April 2015, set to be the lowest of any major economy in the world.
Infrastructure projects will receive a £3bn boost each year from 2015-16, a move set to pump an additional £15bn into the British economy over the next decade.
The chancellor also announced plans to help employers, including the creation of the Employment Allowance which will allow employers to cut £2,000 from their national insurance bill. The government will also double the size of the loans that employers can offer tax free to their staff to pay for items such as season tickets for commuters, to £10,000.
On the tax avoidance front, the Chancellor said he was unveiling “one of the largest ever packages of tax avoidance and evasion measures presented at a Budget”. They include recent agreements with the Isle of Man, Guernsey, and Jersey and the UK’s first ever General Anti-Abuse Rule.
He promised to “name and shame” the promoters of tax avoidance schemes and those who make a living advising other people how to aggressively avoid their taxes by saying “this Government is not going to let you get away with it”.
A new system for tax breaks on child care, announced two days ago, will mean that from 2015, parents with under-fives can claim back up to £1,200 a year per child. It will be extended to children under 12 by 2020.
For pensioners, the chancellor will introduce a simple, flat-rate pension of £144 a week, and bring forward the social care spending cap to 2016, to protect savings above £72,000.
The Chancellor announced the cancellation of the planned September fuel duty rise and the above-inflation rise in beer duty, and has promised to take a penny off the price of a pint.