[update id=”grannytax” time=”16:10″ text=”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.
Harry Thompson says:
Great budget coverage today – well done PS. This is why this it’s my favourite blog.
Sarah Wherry says:
Wouldn’t it be a fairer way to simplify taxes, by ‘simply’ taxing all the millionaires/billionaires a little more. That way the poor and the vulnerable will not have to tighten their already stricken personal budgeting.
Wouldn’t it also be fair to say, that the government should have some kind of auditors go through the books…………how about a specialist team of accounts, who have absolutely no vested interest in the outcome of afore-said audit!!!!!!
NonnyMouse says:
I’m confused. Surely most people who retire don’t have any significant wages to tax. The only people being hit are people with large private pensions and they benefited from pension relief anyway.
Guido Fawkes says:
He’s as bad as Gordon Brown.
Dairymaid says:
I really can’t see how a tapered child benefit reduction simplifies anything – nothing is simpler than a universal benefit
Stone says:
Granny tax – yeah, that’s bad
income tax relief changes – yeah, bad for charities… best thing for charities is less tax for everyone though
welfare cuts hinted at – yeah, cos too much is being spent
tax allowance changes for pensioners – again, solution is tax less overall
‘families worse off’ – yeah, cos too much is handed out to them at present
50% down to 45% – yeah, some people are better off now, i.e. those who already contribute vastly more than anyone else proportionally… so basically the law becomes a little fairer
‘cutting top rate does nothing for economy’ – it can’t fail to – less money extracted from economy = more money in economy
basic rate thresholds falling – yes, bad, though contradictory for leftists to say so
higher rate threshold falling – ditto
business investment to drop – yeah, maybe – again, cure it by reducing the burden
public sector job cuts – sourced from one man’s Twitter comment, but let’s say it’s true… public sector is destroying the real economy, needs to be reduced
NonnyMouse says:
I take it everybody has forgotten Labour’s own Granny Tax from just two years ago: http://bit.ly/GK5uCs
They have also forgotten that the IFS said in 2007 that age-related tax allowances were the least efficient way of tackling pensioner poverty.
robert pearce says:
pensions are taxed-shock horror!!!!nonnymouse take note
Jean Rolt says:
Of course pensioners pay tax. We pay tax on pensions which are related to earnings already taxed. The granny tax is clearly unfair.
Tris says:
I think that perhaps, NonnyMouse, you might like to consider that just because someone criticises the Conservative’s policies, it doesn’t mean that they are supporting Labour’s.
There are otehr political alternatives (and no, I’m not talking about that lot that used to be the third party, and is probably by now the 23rd party).