March 2016 Budget AnnouncedMarch 16, 2016 1:44 pm
March 2016 Budget: Lucky Number Eight for Osborne?
It is that time again – and fever sweeps across the nation! Maybe a slight exaggeration but those of you with a penchant for economics combined with politics, it is a day to note down in your ledger. This is George Osborne’s eighth Budget and I am curious to see where the axe will fall this time. Likewise, Osborne is not without his surprises as we have seen in previous budgets.
So without further ado, here is the March 2016 Budget:
The Chancellor set out this March 2016 Budget stating that the UK economy was “set to be the fastest growing economy in the world” and prefaced the budget stating that the “UK was not immune” to booms and bust. This budget was certainly engendered with a long term viewpoint, discussing statistics and the economic storm clouds that are hovering. Mr Osborne discussed his long term view that the UK was looking to stabilise and position itself as a leading economy. The Chancellor stressed the future instability and the need to plan appropriately to cement the UK’s ability to handle an increasingly difficult global economic outlook. He also went on to thank the British public for its hard work and for supporting his previous budgets.
UK Economic Growth Forecast Revised Down
The Office for Budget Responsibility (OBR) has downgraded its forecast of UK economic growth in 2015 from 2.4% to 2.2%.
The OBR have also revised the forecast for the following years: from 2.4% to 2% (2016), from 2.5% to 2.2% (2017), from 2.4% to 2.1% (2018) and from 2.3% to 2.1% formerly in 2019 and latterly 2020.
The OBR inflation forecast was 0.7% this year and 1.6% next year.
Fundamental Reform of the Business Tax System – A simpler system
Clamp down on foreign businesses avoiding tax
Reduction in Corporation Tax – by April 2020 it will be 17%
Business Rates Cut – From April 2017 – Small Businesses to pay no rates
Tax Cut on Supplementary Charge for Oil & Gas from 20% to 10%
Sugar Levy on the Soft Drinks industry to be introduced in 2018 – 520 million pounds is estimated to be raised
Capital Gains Tax to be cut from 28% & to 20% for Higher Earners and from 18% to 10% for Basic Earners
Tax Free Allowance – will rise to £11,500 in April 2017
Higher Rates Allowance – will rise to £45,000 in April 2017
Pension & Savings
“Pensions too complex and inflexible” – Osborne
Lifetime ISA – for anyone under the age of 40 – £4,000 bracket per year and the government will put in £1,000
ISA Limit to be raised to £20,000 in April 2017
‘Radical’ devolution of power to Councils and Communities
More Mayors for areas in the UK – West Midlands will be able to vote for one in the next year
Local Councils will raise their own money and 100% of the money raised will be spent in that council
“The Devolution Revolution is taking hold” – Osborne
Transport: – Stronger links for the UK and Northern England especially
HS3 gets the Green Light
New tunnel road for Manchester to Sheffield
A66 & A69 Upgrades for the North Pennines
Crossrail 2 also to get the Green Light
Housing: Zone housing development to make houses ready for 5G connectivity
Schools to become Academies
Northern England to be focused
Maths to be taught to 18 – (my old Maths teacher would be distraught)
Alcohol and Fuel Duties
Fuel Duty to be frozen for the sixth year in a row – a saving of £75 per average driver and £250 for small businesses
Freezing Beer Duty and Cider Duty yet again
The Chancellor closed his Budget by stating “I commend a budget that puts the next generation first”.
*Apologies for any errors – I am amending as the Budget is being announced*
Article by Michael Cooper