George Osborne presented his third Budget on Wednesday 21 March 2012.
The Chancellor started by reaffirming the need for stability in the UK economy and finished in Churchillian style with phrases such as:
‘No people will strive as the British will strive.’
‘No country will adapt as the British will adapt.’
‘This country borrowed its way into trouble. Now we’re going to earn our way out.’
Towards the end of last year the Government issued the majority of the clauses, in draft, of Finance Bill 2012 together with updates on consultations. The publication of the draft Finance Bill clauses is part of the Government’s improvements in the way tax policy is developed, communicated and legislated. The Budget updates some of these previous announcements and also proposes further measures. Some of these changes apply from April 2012 and some take effect at a later date, so the timing needs to be carefully considered.
Main Budget proposals
- A further increase in the personal allowance but with a reduction in the basic rate band from April 2013.
- An additional 1% cut in the main rate of corporation tax to 24% from April 2012.
- A reduction in the additional rate of income tax from 50% to 45% from April 2013.
- Details of how Child Benefit will be taxed on those with income in excess of £50,000.
- Proposals for tax simplification for smaller businesses.
- Consultation on the introduction of a general anti-abuse rule.
- Increased Stamp Duty Land Tax on high value residential properties.
Some of the changes detailed in this summary have been the subject of earlier announcements. Here is a reminder of some of the more important ones:
- The introduction of a Statutory Residence Test
- Changes for non-domiciled individuals
- Reduced rates of inheritance tax for charitable individuals
- Introduction of the Seed Enterprise Investment Scheme
- Reduction of the Annual Investment Allowance from April 2012
- Changes to the relief available for Research and Development expenditure.