The Budget In Brief
The 2012 Budget In Brief
Just incase you didn’t see the news last night here is the budget in brief.
In all, 23million basic-rate taxpayers are expected to benefit, and the Chancellor will signal that he wants to increase the threshold to £10,000 by April 2014. George Osborne, will also press ahead with a cut in Labour's 50p top rate of tax, paid on income over £150,000, to 45p, despite polls suggesting two-thirds of Conservative voters oppose the move.
BUDGET 2012: Top rate of tax slashed from 50p to 45p after it fails to raise expected £2.5bn from higher earners
The cut will affect just one per cent of people and is expected to cost the government somewhere in the region of £400million.
Businesses large and small were given welcome relief from the Chancellor today when he announced plans to slash corporation tax further in a bid to improve economic growth.
In an effort to show the world Britain is open for business, George Osborne cut the amount of tax firms pay on profits from 26 per cent to 24 per cent, double the reduction previously announced.
The cut will come into effect in April and Mr Osborne also spoke of his intention to drop the rate further, to just 22p in the pound by the end of his Government's term in office.
Small businesses are also set to benefit from a greater supply of credit as Mr Osborne announced a £20bn Government-backed loan scheme.
The much-trailed move to get banks lending to business is hoped to aid Britain's economic recovery.
From today, firms with a maximum turnover of £50m will be allowed to apply for the first £5bn of loans from banks including Royal Bank of Scotland, Barclays, Santander and Lloyds.
Drinkers and smokers faced added pain today as George Osborne confirmed another duty rise on alcohol and cigarettes.
The Chancellor told the House of Commons that alcohol will be subject to a rise in duty of 7.2 per cent that will see the price of a pint rising by as much as 10p.
Cigarettes will also increase by five per cent above the rate of inflation, increasing the price of a packet by 37p.
Wine and spirits will also be hit by the increase in alcohol duty. The average bottle of wine will now rise to £5, according to industry figures.
George Osborne told the House of Commons today that the increases would be effective from 2013.
He said: 'Smoking remains the biggest cause of preventable illness in this country.
'There is strong evidence that increasing the price of cigarettes deters people from smoking.
'Duty on a packet of cigarettes will rise by five per cent above the rate of inflation. This will increase the cost of a packet of cigarettes by 37p.'
The Chancellor confirmed that alcohol duty will increase by five per cent above inflation. The changes will be effective immediately.
A planned rise in the price of petrol will go ahead as George Osborne refused to freeze or reduce the amount of tax motorists pay for fuel.
Despite pressure from hard-pressed motorists and businesses that rely on fuel, such as hauliers, there will be a 3.02p per litre hike in fuel duty from August.