Budget 2014: Here are some Budget changes George Osborne could make, but I don't hold out much hope in times of austerity

 

Can't say I'm looking forward much to next Wednesday's Budget. The days when we can anticipate good news have long since disappeared under the austerity measures still being pushed by the Coalition.

So when George Osborne rises at 12.30pm on 19 March, I advise you to switch off and go and do something more interesting. We'll be happy to monitor his speech, and the reaction, and report back in our Budget supplement on Thursday.

But just in case any of Mr Osborne's advisers are reading and still looking for good ideas, here are a few changes I'd like to see.

We won't see any tax cuts, apart for a few high-earners, I suspect, but it is time to look again at the 40 per cent tax rate threshold. Many thousands more people have been pushed into paying higher-rate tax in recent years and more will be hit from the beginning of the next tax year under current plans.

The rate kicks in at £32,011 of taxed income, but that is falling to £31,866. The personal allowance, the amount of money you can earn without paying tax, is climbing, from £9,440 to £10,000. But putting the two together means the amount you earn before being hit by 40 per cent tax will climb from just £41,451 to £41,866.

I think it fairer for the greater tax take to come from higher earners than middle-income folk, many of whom are struggling. So while I would welcome the raising of the personal allowance to £10,500, the figure that's been circulating in recent weeks, I think it's time that the 40 per cent threshold kicked in at, say, £45,000.

The lost tax could be raised by lowering the additional 50 per cent tax rate from its current level of £150,000.

But, frankly, I don't expect there to be much fresh tinkering with tax bands this Budget. If he's any sort of politician, and he is, Mr Osborne will save the giveaways for the pre-election Budget in 2015.

So what potential good news could there be? I'm still holding out hope for a change to the way stamp duty is collected. Transferring the tax to the seller, rather than the buyer, would at a stroke ease things for the many first-time buyers who struggle to raise stamp duty of more than £1,000 on top of a hefty deposit.

For savers I'd like the Isa rules to be changed to allow people to transfer between and cash and equity Isas. Currently you can switch your savings out of a cash Isa into stocks and shares, but not the other way. That's a nonsense for those who want to have a more flexible approach to their savings.

However, I would resist attempts to increase the Isa allowance to nearer £20,000 a year as some are proposing. The annual level of £11,520, which climbs to £11,880 from 6 April, seems adequate to me. I would also be wary of the temptation to introduce a limit as to how much people can stash in an Isa. Some have talked of £100,000, which does seem a tidy sum to avoid paying tax on, but if people have played by the rules, so be it.

s.read@independent.co.uk

Twitter: @simonnread

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Digital Optimisation Executive - Marketing

    £30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

    Recruitment Genius: Financial Reporting Manager

    £70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

    Recruitment Genius: Payments Operations Assistant

    £23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

    Recruitment Genius: Telephone Debt Negotiator

    £13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

    Day In a Page

    Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

    ‘We won’t stop until Syria is back to normal’

    Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
    The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

    The inside story of how Bill Clinton built a $2bn global foundation...

    ... and how it may undermine Hillary's chances in 2016
    12 best olive oils

    Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

    Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
    Sepp Blatter resignation: The beginning of Fifa's long road to reform?

    Does Blatter's departure mean Fifa will automatically clean up its act?

    Don't bet on it, says Tom Peck
    Charles Kennedy: The baby of the House who grew into a Lib Dem giant

    The baby of the House who grew into a Lib Dem giant

    Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
    Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

    The harrowing testament of a five-year-old victim of Syria's endless civil war

    Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
    The future of songwriting: How streaming is changing everything we know about making music

    The future of songwriting

    How streaming is changing everything we know about making music
    William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

    Recognition at long last

    Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
    Beating obesity: The new pacemaker which helps over-eaters

    Beating obesity

    The new pacemaker which helps over-eaters
    9 best women's festival waterproofs

    Ready for rain: 9 best women's festival waterproofs

    These are the macs to keep your denim dry and your hair frizz-free(ish)
    Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

    Wiggins worried

    Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
    Liverpool close in on Milner signing

    Liverpool close in on Milner signing

    Reds baulk at Christian Benteke £32.5m release clause
    On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

    On your feet!

    Spending half the day standing 'reduces risk of heart attacks and cancer'
    With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

    The big NHS question

    Why are there so few new GPs when so many want to study medicine?
    Big knickers are back: Thongs ain't what they used to be

    Thongs ain't what they used to be

    Big knickers are back