What can we expect from the Budget?

 

It is a favourite (but tedious) catch phrase of every Government minister talking to a journalist in the run-up to the budget.

“Don’t ask me what’s in it because I can’t tell you,” they say – often before you’ve even asked the question.

This year has been little different – expect in one important regard: it’s simply not true.

Budget 2012 has been the most comprehensively leaked of any in recent times (perhaps with the exception of 1996 budget which was sent in its entirety to the Daily Mirror - but then they didn’t publish it).

But until 12.30 we won’t know for sure if the leaks have been accurate or not.

So here is a guide to the key points we’re expecting in the budget announcement to check it off against Mr Osborne’s actual speech.

1) He will announce that the 50p tax rate for those earning over £150,000 will be abolished. He is likely to cut it to 45p initially with the option of going further and reducing it to 40p by the time of the next election.

2) He will announce a big increase in the personal tax allowance to around £9,000 by next April to meet the Government’s commitment that no-one earning less than £10,000 pays any tax is met a year early.

3) He will introduce a cap on tax relief and allowances that the rich can claim as a proportion of their income to ensure that everyone pays a minimum proportion of their earnings to the state. The figure is expected to be set at 20 per cent.

4) He will shut a loophole which allows rich individuals to avoid stamp duty by purchasing properties through companies based overseas.

5) The cut in child benefits for higher rate tax payers will go ahead. But he will introduce transitional arrangements to help families where only one parent works and is only just above the top rate of tax. The cut may not kick in unless total income is over £50,000.

6) He will pledge to send every taxpayer a detailed breakdown of how much tax they pay and where it is spent by 2014.

7) He will offer small businesses up to £20 billion of Government backed loans at a lower rate of interest.

8) Stamp duty will rise to seven per cent for home worth over £2 million. This is likely be dubbed by the Lib Dems the "mansion purchase tax".

9) The Chancellor will also use to the speech to declare the end of national pay bargaining so Government departments will be able to set local rates of pay for the first time.

10) A rise in alcohol duty is expected to add 7p or 8p to a pint of beer. Tobacco will rise by two per cent above inflation.

11) It is just possible that a 3p rise in fuel duty due for this August will be postponed. This is the least certain prediction but the tax is deeply unpopular and all prices are not falling.

12) He will announce that the Office of Budget Responsibility has raised its growth forecast from 0.7 per cent to 0.8 per cent for 2012. This will save the exchequer £10 billion over the next four years.

13) He will pledge to push ahead with the Government’s planning reforms – making it easier for developers to build on greenfield sites.

14) There will be an announcement not yet leaked to be a “surprise” on the day.

Now let see if we’re right.

Updated 10.20am 21/03/2012

Government accused of 'stealth tax' on pensioners
Corporation tax cut to 24% in April
Unions criticise regional pay rates plan
Thousands escape child benefit axe
TV tax credit 'could end exodus' of big-budget shows
Smokers slam tobacco duty rise
Job fears over increase in beer tax increase
Plane passengers hit by air passenger duty hike
Anger over George Osborne's North Sea bid
Videogame industry celebrates tax relief in Budget
University research gets £100m boost
Ed Miliband condemns top rate tax cut
Estate agents warn that stamp duty raid could hit all homeowners
Government accused of producing a Budget 'for the rich'
George Osborne slashes 50% top tax rate
Osborne dashes fuel price hopes
Oliver Wright on the Budget: Now we have to look at what was NOT said
James Moore: Budget snap judgements
The Budget at a glance
Full text of the Budget speech

 

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