Budget Highlights 2012

WEDNESDAY, 21 MARCH 2012

Income Tax

• 50p top rate of tax cut to 45p from April 2013;
• Personal income tax allowance increases to £9205 from April 2013;
• Anti-tax avoidance rule introduced.

Pensions

• Age-related allowances for pensioners simplified from April 2013 with single personal allowance that ensures no pensioner loses;
• Automatic review of state pension age to ensure it keeps pace with increasing lifespans;
• New single-tier state pension for future pensioners to be set at about £140 and based on contributions.

Child Benefit

• To be reduced by 1% for every £100 earned by a parent over £50,000 and scrapped altogether at £60,000.

Property

• 7% stamp duty level introduced on purchase of homes worth more than £2million. Homes in this price bracket upwards bought through companies will pay 15% stamp duty;
• More financial help for building firms.

Fuel, alcohol and cigarettes

• Tobacco duty to rise by 5% above inflation from 6pm – adding 37p to pack of cigarettes;
• No change on alcohol duty;
• No change to fuel duty plans.

Business

• Corporation tax reduced to 24% from April and down to 22% by 2014;
• More straightforward tax system for small firms turning over up to £77,000;
• Possible enterprise loans for young people to start business.

Commerce

• Sunday trading laws relaxed for eight Sundays during Olympics and Paralympics, starting July 22.

Economy

• Office for Budget Responsibility revises 2012 UK growth forecast up from 0.7% to 0.8%. 2013 2%, 2014 is 2.7%;
• UK inflation forecast to fall from 2.8% this year to 1.9% in 2013;
• Borrowing this year to be £126billion;
• Unemployment to hit 8.7% later this year before falling to 6.3% by 2016-17.