The 2014 Budget: At a glance

Cutting through the political rhetoric and the headline-grabbing statements, the Boar takes an objective look at the 2014 budget and explains the key reforms announced.

Delivering his fifth budget, George Osborne said that the 2014 budget would be ‘for the makers, doers and the savers’.

 

In a time when the economy is still fragile and the government’s commitment to austerity remains sound, few ‘give-aways’ were predicted. However, nearing the end of the 55 minute speech the Chancellor made a few unexpected announcements and managed to pull a couple of rabbits out of the red box.

The most radical and far-reaching reforms were changes to the ‘pension world’ and help for businesses to invest and export.

Meanwhile Labour leader Ed Miliband criticised Mr Osborne for failing to mention in his speech that “the working people of Britain are worse off under the Tories, living standards are down month after month, year after year”.

Here’s the ‘at-a-glance’ outlook:

 

Business: ”Britain has to up its game in exports”

1. Direct lending from government to UK businesses doubled to £3bn in a bid to promote exports.

2. Interest rates on that lending to be cut by a third.

3. Three year extension to business rate discounts and enhanced capital allowances in enterprise zones.

4. Corporation tax down to 21% this year and 20% in 2015 and U21’s taken out of the tax rate.

5. £7bn package to cut manufacturers’ energy bills to make businesses more competitive globally.

 

Tax:

1. Point at which people start paying income tax will be raised to £10,500. This equates to roughly £800 less in tax each year for the “typical tax payer”.

2. Threshold for 40p income tax to rise from £41,450 to £41,865 next month and by a further 1% next year.

3. Bingo duty to fall to 10%

4. Tax on homes owned through a company to be extended from residential properties worth more than £2m to those worth more than £500,000

5. All long-haul flights to carry lower rate of air duty.

 

Infrastructure: ”This country needs to build more”

1. Help to Buy scheme for new-build homes extended to 2020.

2. Support for the building of more than 200,000 new homes.

3. £140m extra for flood defence repairs and maintenance as well as a £200m fund made available to fix potholes.

 

Pensions:

1. All tax restrictions on pensioners’ access to their pension pots to be removed.

2. Increase in total pension savings people can take as a lump sum to £30,000.

3. New Pensioner Bond, paying “market-leading” rates, available from January to over-65s.

4. All retirees on defined contribution pensions to be offered free, impartial, face-to-face advice.

 

Savings: “You have earned it; you have saved it and this Government is on your side”

1. Cash and shares ISAs to be merged into single New ISA with annual tax-free savings limit of £15,000 from 1 July.

2. The 10p tax rate for savers abolished.

3. Zero tax band to cover £5,000 of savings.

4. Cap on Premium Bonds to be lifted from £30,000 to £40,000 in June and £50,000 next year.

 

Fuel, Alcohol and Tobacco:

1. Planned fuel duty rise for September to be scrapped.

2. Beer duty cut by 1p a pint while duty on spirits and ordinary cider to be frozen.

3. Tobacco duty to rise by 2% above inflation and the escalator to be extended beyond the next general election.

 

Jobs: ”I am determined that Britain will outcompete, outsmart and outdo the rest of the world”

1. Support for more than 100,000 new apprenticeships.

2. New Alan Turing Institute for computing “big data” to boost Britain’s IT prowess.

 

Spending and Welfare:

1. Foreign aid to be 0.7% of national income.

2. Public sector spending reduction to reach £1bn by 2015-16.

3. A permanent cap on welfare, excluding state pension, set at £119bn in 2015-16, rising in line with forecast inflation to £127bn in 2018-19.

4. A new pound coin is to be introduced over the next three years in an effort to reduce the number of counterfeits: ”a resilient pound for a resilient economy”.

 

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