It set out the actions the Government will take in three areas - creating a stable economy, a fairer, more efficient and simpler tax system, and further reforms to support growth.
A stable economy
In line with the Government’s fiscal strategy with regard to public finances returning to a sustainable path, the Budget sets out:
- a neutral impact on the public finances; and
- clear progress in implementing the Government’s fiscal consolidation plan and reforms to welfare and public services, with borrowing £11 billion lower over the forecast period than predicted at the 2011 Autumn Statement.
A fairer, more efficient and simpler tax system
The Government said it is committed to creating a more sustainable tax system that is fair and supports growth. This Budget announced:
- An increase in the personal allowance by a further £1,100 in April 2013 - the largest increase in the personal allowance in the last 30 years;
- An additional one per cent reduction in the main rate of corporation tax. The rate will reduce from 26 per cent to 24 per cent in April 2012, then to 23 per cent in April 2013 and to 22 per cent in April 2014;
- A reduction in the top rate of tax from 50 pence to 45 pence in April 2013;
- The introduction of a limit on all uncapped income tax reliefs. For anyone seeking to claim more than £50,000 of relief, a cap will be set at 25 per cent of income (or £50,000, whichever is greater).
- The correction of certain anomalies in the VAT system that cause similar products to be taxed very differently.
- A crack down on tax avoidance to protect revenues by closing down schemes which avoid stamp duty land tax, corporation tax, inheritance tax and income tax;
- An increase in the tax charged on high value properties by introducing a new Stamp Duty Land Tax rate of seven per cent for residential properties over £2 million.
Reforms to support growthThe Government set out its aims to put the UK on a path to sustainable, long-term economic growth, including the latest measures:
- To relax Sunday Trading laws during the Olympics and Paralympics;
- Develope a National Roads Strategy, as well as exploring new ownership and financing models for the national roads network;
- Introduce a package of oil and gas measures to secure additional investment in the UK Continental Shelf;
- Establish a UK centre for aerodynamics to open in 2012/13 and support innovation in aerospace technology;
- Support Network Rail to invest a further £130 million in the Northern Hub rail scheme to improve transport links between the northern cities of England; and
- Publish a strategy for gas generation in the autumn.
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Susie Hughes © Shout99 2012