In the usual round of speculation leading up to Budget Day there was talk of: a relaxation of the Inheritance Tax rules for taxpayers passing on the family home to children; the potential phasing out of personal income tax returns for many taxpayers with ‘simple’ tax affairs; further reforms to the pensions regime; and further increases in the income tax personal allowance.
The improving economic forecasts suggested that Mr Osborne had £6 billion to play with so plenty of leeway for some pre-Election ‘sweeteners’.
So did he resist the temptation ….
He described Britain as ‘walking tall again’ having grown at a faster rate than any other major advanced economy. There were no real ‘gimmicks’ with Mr Osborne stressing time and again that his attention is on reducing the deficit with no ‘unfunded spending’.
There was no mention of Inheritance Tax, plenty of jokes, hints of things to come and a claim that the present Government has increased the tax burden on the wealthiest taxpayers.
The main announcements were:
- Further moves on tax anti-avoidance aimed at those individuals and companies indulging in aggressive tax planning and indeed those that advise them – tax to be raised £3.1 billion;
- The creation of digital tax accounts for individual taxpayers which will supposedly eliminate the need for annual income tax returns for many by 2020;
- A reduction in the pension lifetime allowance to £1 million and changes to allow pensioners to access annuities;
- Savings changes: a flexible ISA, a ‘Help to Buy’ ISA, and a tax-free Personal Savings Allowance of £1,000 for basic rate taxpayers;
- New and improved tax breaks for the companies involved in the creative sectors; and
- Further moves on personal tax allowances and rate bands to realise the targets of a £12,500 personal allowance and a higher rate threshold of £50,000 by the end of the next term.
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