Budget 2015: what is means for Dorset and Hampshire businesses and individuals
By Suzi Dixon, Community Editor
George Osborne claims Britain was “walking tall again” as he sets out his final Budget before the election. There are various measure that will affect our clients and candidates professionally and personally, which we have summarised below for you.
Growth and jobs
Osborne claims as many as 1,000 jobs are created a day – that certainly ties in with what we are seeing in Dorset & Hampshire, with vacancies coming to us every day. Economic growth in 2015 will be 2.5pc, Osborne says. This compares to 2.4pc predicted in December and 2.1pc a year ago. Inflation is due to fall to 0.2pc this year, which means that October’s rise in the minimum wage will be more noticeable than last year.
In the final year of this decade, 2019-20, public spending is expected to grow in line with the growth of the economy.
In terms of jobs, unemployment will fall from 5.7pc now to 5.3pc at the end of the year. This is down 3 per cent from when the Coalition came into power, Osborne said.
Osborne said: “Five years ago, millions of people could not find work. Today, I can report: more people have jobs in Britain than ever before.”
For entrepreneurs, the annual tax return will be scrapped and replaced with a digital account over the next five years, where HM Revenue and Customs will automatically collate the tax from employers, banks and investment firms into a single online tax account which can be checked at any time.
Plans to bring new express trains to South West via a new rail franchise will also give business a boost. There will be a review of business rates. There are measures to improve mobile coverage, broadband and wifi, with ultrafast broadband to nearly all homes, supporting entrepreneurs and those with second jobs.
The plan to tackle multinationals moving overseas to avoid tax has been widely reported in the press. The diverted profits tax, dubbed the ‘Google Tax’ starts next month, charging a flat 25% levy on profits that HMRC deem to have moved overseas. What’s more, corporation tax simplified to cut relief on foreign branches.
From next April, first £1,000 of interest earned on savings will be tax-free. What’s more, new “fully flexible” ISAs allow you to take out money and put it back in without losing any tax-free entitlement.
First-time house buyers will have their deposits topped up by the Government with a Help to Buy ISA. For example, a 10 per cent deposit on the average first home costs £15,000, so if someone puts in up to £12,000, the Government will put in up to a maximum of £3,000 more.
Personal tax allowance will rise to £10,800 next year, £11,000 in 2017.
The Chancellor says 27million people will benefit from these measures. Pensions Savers can sell their annuities for cash. The lifetime allowance, which Osborne says is unsustainable, will be cut from £1.25m to £1m. Osborne says that tax loopholes being closed will raise £3.1billion.
Beer duty is down by 1p per pint for the third year running. Duty on cider and spirits such as Scotch whisky will be cut by 2%, “to back one of the UK’s biggest exports”, Osborne said, and wine duty will be frozen.
Fuel duty rise has been scrapped. “£10 off a tank with the Tories” said the Chancellor, to some muttering from Lib Dems, according to Twitter.
More cuts as child benefit will be restricted to three children for new claimants, with a reduction of the overall welfare cap from £26,000 to £23,000/ Under-25s will lose the right to housing and unemployment benefits if they refuse offers of work, training or education.
Osborne said a combination of lower welfare bills, falling interest rates, and further sales for the bailed out banks meant borrowing was set to fall faster than forecast.
“The hard work and sacrifice of the British people has paid off. The original debt target I set out in my first Budget has been met,” he said.
But Labour leader Ed Miliband said there was a large gap between the Chancellor’s speech rhetoric and the reality of people’s lives. He asked what had happened to plans for a £7ph minimum wage. He said: “This is a Budget people won’t believe from a Government that is not on their side – because of their record, because of their instinct, because of their plans for the future.”