UPDATE (16:10) »They are calling the pensioners' tax allowance freeze the Granny Tax now, with Ed Balls telling the Commons that 'This looks like a tax grab on grannies'. Oh, dear.
The budget has been delivered, and as usual the devil is in the detail. Now experts and politicos will be delving into the small print to find out all of the little changes and measures that George Osborne didn’t dwell on- those stings in the tail that will be causing the government trouble in the next few days. Here, we will be bringing them to you as they become apparent.
- Osborne has introduced a new corporate tax loophole which will cost the UK £1 billion and take £4 billion from developing countries used as tax havens by British businesses (from ActionAid).
- 4.5 million pensioners, nearly half of all pensioners in the country, will be worse off in real terms as a result of Osborne’s Granny Tax (more from Gransnet).
- The government has admitted that cuts to income tax relief could slash major donations to charities, which rely on public generosity (more at HM Treasury).
- The budget hints at a further £10.5bn welfare cuts still to come (more at The Guardian)
- The plans announced in the budget today are set to hit pensioners hard as the government pockets £1.2 billion by freezing age-related tax allowances. Freezing the personal tax allowance means a tax rise by the back door for around 150,000 pensioners who could face having to work longer with another review of the pension age – whilst Osborne drops the top rate of tax by 5% (more at Citywire).
- The tax hike was presented as a “tax simplification” by Osborne – but experts quickly spotted the extra burden for some of the nation’s most vulnerable.
- The average family with children will lose £253 per year as a result of the measures contained in the budget- with the average household income reduced by 1% – but by 2% for the poorest 20% of the population (more at The Daily Express).
- Around 14,000 British millionaires will keep getting richer, paying £40,000 less in taxes each year as a result of the 5% tax cut given to them by the Chancellor (more at The Guardian).
- The OBR say that cutting the 50p tax rate will do nothing for the economy, making “no … material adjustments to the economy forecast” (more at HM Treasury).
- The basic rate of tax threshold will fall from £34,370 to £32,245 between 2013 and 2014, hitting the squeezed middle once again, as the richest have their tax bills cut (more at HM Treasury).
- 200,000 – 300,000 more people will start paying a higher rate of tax, with the threshold starting at £41,450 (more at The Telegraph)
- Following the budget, the OBR have dropped their forecast for business investment this year from 7.7% to just 0.7% (from Will Straw).
- The OBR have also increased their forecast for public sector job cuts up by 20,000 to 730,000 (from George Eaton).
Have we missed another Budget Nasty? comment below or tweet us @PSbook.
