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What did you think of the 2011 budget?
George Osborne has delivered his budget speech for the 2011/12 fiscal year to parliament.
The Chancellor said corporation tax would be cut by two percentage points to 26 percent from April, rather than by just the one point originally planned. A levy on banks would be increased to help pay for it.
Osborne also announced a surprise cut in fuel duty, while slapping higher charges on oil and gas production which he said would raise 2 billion pounds. Meanwhile, the government will offer loans to help first-time buyers get on the property ladder.
Osborne called it a “Budget for growth and jobs.” Do you agree? Take part in our poll below or leave a comment on this page.
What did you think of the 2011 budget?
- Great budget!
- More good than bad
- Neither good nor bad
- More bad than good
- Awful budget!
from The Great Debate UK:
Taxes and the emergency budget
-Julia Whittle is head of International at Punter Southall Financial Management. The opinions expressed are her own. Join Reuters for a live discussion with guests as UK Chancellor George Osborne makes an emergency budget statement at 12:30 p.m. British time on Tuesday, June 22, 2010.-
It is highly unlikely previous Capital Gains Tax proposals will be reversed in Chancellor George Osborne's first budget.
The new rate is due to increase in line with income tax – and the option of taking it up to the highest rate of 50 percent has not been ruled out. The change could start from June 22, or even be backdated to April 6, 2010
This will hit second properties as well as investment portfolios. The tightening up of the definitions around “private residence relief” which enables people to sell their main residence free if tax could pour salt on the wound for second-property owners.
Regarding pensions tax relief, we believe Chancellor George Osborne is likely to stick with the principles of the current proposals, but could ease some of the administrative complexities.
There’s also a chance that he could decide to replace the current proposals with a lower annual allowance which the pensions industry has been lobbying for as a simpler alternative.
from The Great Debate UK:
Osborne to show no sympathy for middle or high earners
-Nick Earl is partner at chartered financial planners Wardour Partners LLP. The opinions expressed are his own. Join Reuters for a live discussion with guests as UK Chancellor George Osborne makes an emergency budget statement at 12:30 p.m. British time on Tuesday, June 22, 2010.-
On Tuesday we will hear the first budget from new Chancellor George Osborne.
From the snippets of information we have heard from the Lib-Con coalition camp, I do not anticipate this budget will show much sympathy for middle or high earners.
It is unlikely that the government will revise the higher rate tax-relief rules for those earning in excess of 150,000 pounds per annum.
A more possible outcome is that higher rate relief could be withdrawn altogether and should this happen it will be those who earn between approximately 40,000 pounds and 130,000 pounds who suffer the impact the most.
However, with this being an area that the Conservatives and Liberal Democrats disagree on, it is perhaps more likely to be a compromise where pension tax relief is scrapped for earnings over a set level.
from The Great Debate UK:
Key tests for the emergency budget
-Thomas Story is tax director at BDO LLP. The opinions expressed are his own. Join Reuters for a live discussion with guests as UK Chancellor George Osborne makes an emergency budget statement at 12:30 p.m. British time on Tuesday, June 22, 2010.-
Ten key tests by which Chancellor George Osborne will be judged when he delivers the emergency budget on Tuesday:
1. Do the tax measures make a significant contribution to reducing the fiscal deficit?
The Chancellor is caught on the horns of a dilemma with the promise of various tax cuts contained in the coalition agreement needing to be offset by larger tax rises in the emergency budget to help plug the gap in the government’s finances. However, this may allow some targeted tax cuts to be introduced from 2011 but only in small steps as the economy improves.
2. Will the total tax take be re-focused towards indirect taxes upon consumption and away from taxes upon income and profits?
It would be a massive surprise if there was no announcement of a significant VAT uplift on Budget Day. On current projections VAT is anticipated to bring in 78 billion pounds for 2010-11 and a rise to 20 percent could add up to a further 11 billion pounds. Given that the Chancellor is unlikely to have an opportunity to raise VAT again this parliament, he may be tempted to raise the rate even higher with a promise to reduce it once the deficit is under control.
from The Great Debate UK:
A budget of woes? Where has our imagination gone?
-Ruth Porter is communications manager at the Institute of Economic Affairs. The opinions expressed are her own. Join Reuters for a live discussion with guests as Chancellor George Osborne makes an emergency budget statement at 12:30 p.m. British time on Tuesday, June 22, 2010.-
George Osborne has the chance to do something really radical on Tuesday in his budget statement.
He must cut public spending to shore up Britain’s precarious economic situation - he has no choice.
But the fiscal crisis also means he can do far more than this.
Indeed, the Chancellor has perhaps the best opportunity in a generation to make the sweeping changes necessary for the UK to reduce the size of the state and restore economic growth.
Imagine using the budget to restructure how we tax: flattening income taxes, reducing corporation tax, getting rid of bizarre exemptions to VAT, abolishing inheritance tax along with Capital Gains Tax and simplifying enormously the tax rules for individuals and businesses.
from The Great Debate UK:
Budget boost for savers
--Fay Goddard is chief executive of the Personal Finance Society. The opinions expressed are her own.--
As predicted, Budget 2009 was heavy on figures and forecasts and hard on the highest earners. Unsurprisingly it is the latter that the press has picked up on. We all knew that there would be a new top rate of income tax – though some were taken by surprise at the rate of 50 percent and the speed at which it will be introduced.
This wasn’t the only hit taken by those on big salaries with restrictions on pension tax relief for those on over £150K and personal allowances for those earning over £100K. These changes will be of concern and mean that financial advisers will need to review the position of their affected clients. However, advisers will have breathed a sign of relief as the rumoured removal of all higher rate tax relief on pensions did not materialise.
There was better news though for savers. The rise in ISA limits is a welcome move and will be available immediately for those over 50, with everyone else having to wait until next year. Whilst I assume this is aimed at providing some immediate assistance to those who rely on their savings to generate income, with interest rates so low, the increase will not deliver much benefit. At least some pensioners will also receive additional tax credits though.
Help for families came in the form of increased child tax credit, and for those who lose their job in these troubling times statutory redundancy pay has been increased.
Those looking to buy houses under £175K will continue to benefit from the stamp duty holiday – this was extended by a further six months until the end of the calendar year but there was little else to stimulate the housing market.
OK so the budget sucked, we knew that all along.
Just on the point of the VAT cut though, two retailers that I use almost daily – Thorntons and EAT seem to have reverted back to pre VAT prices. Has anyone else noticed this and it is possible to find out what retailers have and haven’t passed on the saving or renaged on their promise to pass it on?
Seems like yet another case of Gordon & co talking a tough story and then doing nothing to police it properly.
What did you think of the Budget?
Chancellor Alistair Darling has made his second annual Budget speech to parliament. Among the measures announced to the House were an increase in petrol duty of 2p per litre in September and a 2 percent increase in alcohol and tobacco duties from tonight.
Darling also announced a scrappage scheme offering £2,000 to people trading in cars older than 10 years for a newer vehicle. From next April there will be a new top tax rate of 50 percent for those earning more than 150,000 pounds a year.
Meanwhile, the annual limit on individual savings accounts has been raised to 10,200 pounds and the Stamp Duty holiday on properties sold for less than 175,000 was extended until the end of the year. There was also money for wind farms and an extra 1 billion pounds to help homeowners and the construction industry.
Darling also forecast that the UK economy will shrink by 3.5 percent in 2009, saying “No country could insulate itself from the world downturn.”
David Cameron, leader of the opposition Conservative party, said: “He is planning to borrow 348 billion pounds over the next two years, that is more — over just two years — than every previous government put together, not just every government since World War Two … but since the Bank of England was first founded more than 300 years ago. This budget does not do enough to bring the public finances under control.”
What did you make of the Chancellor’s Budget speech? Will you benefit from any of the measures? What are your thoughts on the increase in fuel, alcohol and tobacco duties? Do you think the scrappage scheme and new tax rate are a good idea? Finally, do you think it will have a positive effect on the UK economy?
Three points: the Chancellor reminds me of a baby sparrow that has just fallen out of the nest – not a clue; if you think £150K makes you rich, try buying a flat and living in Battersea, and paying into a personal pension at the same time; and finally, I’m leaving asap, will the last person to leave please put the cat out.
In for a penny, in for £175 billion
It may not be tax and spend exactly, but it’s definitely tax and borrow.
For the best part of 12 years, Labour has pursued essentially conservative (with a small ‘c’) economic policies, steadily underburdening itself of the ‘fiscally unreliable’ tag that some earlier Labour administrations were (wrongly or rightly) saddled with.
And for most of the past 12 years, as the global economy steadily expanded and Britain’s along with it, with aggregate wealth rising smoothly, Labour looked strong at the helm each time the budget came around.
But since the global economic crisis hit in late 2007, it has become much harder for the government to keep a tight rein on the fiscal strings as growth has taken a hit, unemployment has risen sharply, and tax receipts have declined.
Last April’s budget was a tough one for Labour, but Wednesday’s budget may well go down as the one that really showed the government reeling as it tries to keep a grip on the purse strings in some of the most challenging economic circumstances imaginable.
The numbers tell the story and are in some cases eye-bogglingly huge.
Finance minister Alistair Darling says the government will have to borrow 175 billion pounds this year and almost as much next year (173 billion) as it tries to plug a widening gap in its finances. WIth the Debt Management Office already struggling to raise funds (if one recent debt auction is anything to go by), the borrowing requirement could be a very big ask.
Sycophantic nonsense.
The statement that “For the best part of 12 years Labour has pursued essentially conservative economic policies” is a complete fabrication.
Brown and his Labour party had the benefit of a firm economic base established very painfully by the Tories after recovering from the previous Labour debacle, plus the benefit of a massive increase in the housing and stock markets which occurred despite, not because of, their own policies. So where’s the money now that we need it? Squandered on absurd policies and attempts to buy votes. As it always is with Labour.
from The Great Debate UK:
A short circuit for electric cars
-- Neil Collins is a Reuters columnist. The opinions expressed are his own --
LONDON, April 16 (Reuters) - Poor old Alistair Darling. The Chancellor is girding himself to deliver a truly ghastly Budget, and lined up a crowd-pleasing headline-grabber to distract attention from the financial horrors ahead.
Then his colleague transport minister Geoff Hoon goes and grabs the headlines for himself, revealing plans to bribe motorists to ditch the gas-guzzler for an electric car.
From 2011, buyers are promised 5,000 pounds towards the cost. Smug drivers pottering along in a subsidised electric car, powered by juice generated from subsidised wind farms, can feel in perfect harmony with nature.
This is an illusion. Carbon dioxide, which is all modern conventional cars emit, is generated by electric cars too, but it's out of sight and out of mind at the power station. In terms of the total energy needed to propel the occupants around, there is no saving from going electric.
There are other snags. Sales of the G-Wiz, a toy car which will still cost 4,000 pounds even with the subsidy, are unlikely to be helped by this*. Drivers will be reluctant to venture far from the comfort of a friendly power point, for fear of being stranded. The exotic metals in the batteries present a sitting target for thieves. If enough people go electric, the concessions like avoidance of parking and road use charges will quickly disappear.
Subsidies distort behaviour, and today's subsidy is tomorrow's tax loophole. Cars use valuable public space, and energy of all kinds is going to get more expensive. If Darling has any strategic sense, he will take advantage of the low oil price to raise the tax on road fuel.
Out of work: Useful resources
Losing your job can come as a massive shock, even if it is something you have been worrying about for months. The latest figures show that for the first time in over a decade the number of people out of work has risen above two million.
If you are one of them, you probably want to find a new job as quickly as possible. Here are a number of useful resources to help you.
Redundancy procedure, your rights, unfair dismissal
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The Wall
I think it is not a joke that they have reduced fuel by 1p….The fact is currently apart from cuting tax, I dont think there is much they can do…Yes they could reduce the tax on fuel, but they would only have to take it from somewhere else!!