Chancellor George Osborne’s sixth and final Budget of this Parliament highlighted Britain’s impressive growth following the recession, as well as the rise in employment and falling debt.
He emphasised that difficult decisions had been taken and he called for the country to stay on course, with current forecasts indicating that Britain will have a Budget Surplus in 2018/19.
Reinforcing its existing policies, the Government pledged to close the remaining loopholes relating to tax avoidance and evasion.
Some of the other headline announcements included an increase in the personal tax-free allowance (up to £10,800 next year, rising to £11,000 in 2017), which will help 27mn people; the introduction of a Help to Buy ISA for first time buyers, which will see the Government contributing £50 to every £200 saved by a first-time buyer for their deposit; and a new measure that will grant pensioners the freedom to sell their annuities for a cash lump sum.
A fuel duty increase, originally scheduled for September, has also been cancelled, which will result in the longest duty freeze in 20 years.
The Chancellor also confirmed an increase in the threshold at which people pay the higher tax rate, which will rise from £42,385 to £43,300 by 2017-18, above the rate of inflation.
In a move to help businesses, the Government will cut corporation tax to 20 per cent – one of the lowest rates of any major economy in the world – while self-employed individuals will no longer be required to pay Class 2 National Insurance contributions during the course of the next Parliament, with the annual tax return also set to be abolished.
A new Personal Savings Allowance will take 95 per cent of taxpayers out of savings tax altogether by allowing a tax-free allowance of £1,000 or £500 for higher rate payers.