My Expectations from The Budget

21 Mar

This afternoon, the Chancellor George Osborne will deliver his third Budget and I am not expecting many surprises.

Based on the leaks, per-announcements and general rhetoric, I’m expecting the following announcements:

  • Houses worth more than £2m will face a new 7% Stamp Duty Band. This is expected to generate a further £1.5 Billion in additional revenue, which is expected to go to funding a rise in the tax free income tax personal allowance.
  • The top rate of income tax will be reduced to 45% from April 2013.
  • The income tax personal allowance will increase to £9,205 in April 2013 before a further rise by April 2014 (possibly to £10,000). This would be a year earlier than previously suggested.
  • From 2014, income tax payers will be sent a detailed breakdown of the tax they pay and how the Government plans to spend the revenue.
  • The closure of loopholes allowing stamp duty to be avoided. (This was achieved by purchasing the house through an offshore company or by exploiting rules put in place to stop developers paying stamp duty twice.)
  • Changes to pension tax relief is expected. (It is expected either as a reduction in the annual allowance to below the current level of £50,000; or a reduction in the rate of tax relief higher rate tax payers can claim.)
  • It is expected that the Office for Budget Responsibility will announce an increase its forecast for growth in 2012 to 0.8%.

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