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Chancellor George Osborne announced that corporation tax will be reduced by 17% by April 2020 and hopes this will lure more companies to Britain.

The tax was already cut from 28% to 20% previously and Osborne believes the extra cuts will provide a boost to local firms. This should save British firms around £15 billion a year by 2020.

A reduction in corporation tax would make Britain the country with the lowest rate in the G20, which will encourage more people to start, run and grow businesses in the UK.

The deficit will also be eliminated over the next 4 years and the government will be running a surplus. There will be a further £3.5 billion of savings from departmental spending in 2019-2020 to help achieve this.

Osborne announced in the Budget that there will be a longer school day for 25% of secondary schools and every school will become an academy by 2022.

The new Lifetime ISA will allow people to save for retirement or to buy a first home as from April 2017, any adult under 40 will be able to open one. Each year up to £4,000 can be saved and savers will receive a 25% bonus from the government.

The current Personal Allowance rate stands at £10,600 before workers start paying tax, but this will change from £11,000 in 2016 to £11,500 in April 2017.

 

 

On Wednesday 16th March Chancellor George Osborne will deliver the Budget plans to members of Parliament in the House of Commons.

Although the Autumn Statement happened back in November 2015, it was another update on the Chancellor’s economic forecasts. The Budget this week will contain more detail and will happen at 12:30pm and last approximately an hour.

Pension changes were not covered in the Autumn Statement, so some expect changes to this in the Budget on Wednesday. Some have said Osborne may reduce the amount that people can save into their pension.

Although nobody knows what George Osborne will deliver in the Budget, many think that it could be possible for him to introduce a new flat rate on tax relief on contributions of between 25% and 33%.

The Chancellor has admitted that he may have to impose further austerity measures. This could mean more reductions in the budgets of non-protected government departments. He also warned that more savings will be needed due to the worsening of the economic backdrop.chancellor

Research suggests that due to the new National Living Wage around 3.7 million women will receive a pay rise by 2020.

The government outlined plans earlier this week for employers who do not meet the National Living Wage requirements. It was said that there would be tougher penalties if employers do not follow the rules.

In April 2016 the National Living Wage of £7.20 will come into effect but will only apply to workers who are over 25 years of age. The current minimum wage is £6.50 but this is due to rise next month to £6.70.

The Resolution Foundation report stated that 2.3 million male workers would also benefit, as most employees will see their earnings rise. The report also found that 6 million people will get a wage rise by the end of the decade.

The Chancellor George Osborne originally laid out plans for the wage in the Budget and has recently gained support because of the amount of employees that will benefit. The number of female workers who will benefit from the rise in 2016 totals to nearly 30% of the female workforce and as many women end up in low-paid jobs, they will welcome the new policy.

The Chancellor George Osbourne will deliver the first Conservative Budget in 20 years on Wednesday 8th July.

It is expected that Osbourne will use tomorrows Budget to unveil plans to devolve powers to mayors or councils to decide for themselves what the rule over trading hours should be in their areas.  Which could see shops and supermarkets being allowed to open for longer on Sundays.

Long gone are the days when the only shop open on a Sunday was the local newsagent, open for a few hours in the morning for people to grab a paper or a pint of milk to then go home and spend the day with their family.

Also expected in tomorrow’s Budget:

  • Cut to inheritance Tax – Osbourne is set to increase the inheritance tax threshold to £1m for couples from 2017 a plan that was first laid out in the Conservative Manifesto.
  • Lower benefits cap – Osbourne will deliver on a campaign promise to cut the household benefits cap from £26,000 to £23,000 a year.
  • Hiking council rents – More than 300,000 council tenants will be told that they need to pay market rent if they earn above £30,000 per year.
  • Slashing BBC Subsidy – The BBC will be expected to take on a £650m yearly bill for providing free television licences for pensioners.

We will be reporting on this once the Budget has taken place tomorrow.

George Osborne has stated that he will deliver a new Budget on the 8th July. He said that it would focus on raising productivity as well as living standards and that this unusual move of having a second Budget within a one-year period is to keep the commitments made to people in work.

The chancellor gave a broad outline of his plans for the next budget but would not comment on the details, including the Conservatives’ planned £12 billion of welfare cuts, Osborne said outside 11 Downing Street. The previous Budget was held on 18 March and included tax cuts for first-time house buyers. After this Budget, the independent forecaster in Institute for Fiscal Studies (IFS) stated that Osborne needed to say exactly how he could go ahead with his plans to cut £12 billion from welfare spending. Of these cuts, £2 billion were outlined ahead of the general election and all cuts are predicted to be in place between 2017 and 2018.

If the economy performs as forecasts made by the independent Office for Budget Responsibility say it should, borrowing will be reduced to £41 billion in 2016-17 and £14.5 billion in 2017-18. However, by 2018-19 the plan for the UK is to be running a budget surplus of £4 billion.

The Conservatives were under pressure form the Institute for Fiscal Studies (IFS) during the election campaign that wanted an explanation as to how they would find the remaining £10.5 billion, considering they gave details of how they will find £1.5 billion of savings from the UK’s social security budget.

The IFS said that the scale of the overall savings would involve the Conservatives looking at child benefit, child tax credit and disability allowances. The Budget would announce reforms of welfare that intended to protect the vulnerable while also making sure that the system is fair to taxpayers, according to the Treasury.

Osborne will say in the Budget that the Conservatives plan to have a fair and balanced approach to the deficit reduction and that the package will include a promise that spending on the NHS will be improved while cutting £13 billion from other Whitehall departments. In addition, designed to raise £5 billion will be a fresh crackdown on tax avoidance.

The timing of the Budget on the 8th July will mean that the Office for Budget Responsibility will produce new forecasts for the economy and the public finances. They will also give time for a finance bill to be passed.