Current Issues | Tax | 19th March 2015
For his final Budget speech before the Election, the Chancellor denied he would be announcing any pre-Election giveaways. Perhaps that’s why he effectively ‘leaked’ his new proposals on further pensions reform in advance!
On the day, Mr Osborne worked hard to explain his preference for reducing the deficit over ‘electioneering’, but did claim that on the "road from austerity to prosperity – this budget works for you."
Measures that work for savers include new Help to Buy ISAs for first-time home buyers and a new £1,000 personal savings allowance to provide "tax free banking" for most people.
There had been much speculation prior to the Budget speech about changes to national insurance contributions and personal tax allowances. The Chancellor confirmed increases in allowances and that the higher rate threshold will rise above the rate of inflation.
There were certainly plenty of claims about progress from austerity to prosperity. Mr Osborne described Britain variously as "walking tall", "working again", "paying its way", "out in front" and "the comeback country" where "the sun is starting to shine" (from where we do not know) during the course of this one Budget speech. Whatever your view of the state of the nation, however, it’s clear that tax – and the ongoing battle against its avoidance – will continue to play a key part in this or any future government’s deficit reduction plans.
Another theme was greater simplification of tax. Abolition of the annual tax return and its replacement with a "revolutionary tax collection system" appears very attractive, but next year sounds like a very ambitious target date, given governments’ track record on previous major IT projects.
This may be just the first of several Budgets this year if there is a change of government after the Election. Whether all of the current Chancellor’s plans will be implemented we can only speculate, but in the meantime, it’s important to know what action you can take now in response. Politicians often make headline-grabbing statements that are not always borne out by the substance. It’s our job to get to the truth and to sort the wheat from the chaff. Did the Budget "work for you", as the Chancellor claimed? Read on to find out.