2015 Budget: 'Britain is walking tall again', proclaims Chancellor
18 Mar 2015
Chancellor George Osborne delivered his 2015 ‘pre-election’ Budget in bullish mood. Proclaiming that ‘Britain is walking tall again’, the Chancellor announced that the national debt target has been met and predicted the ‘end of austerity’ a year early.
The Office for Budget Responsibility has revised economic growth slightly upwards from 2.4% to 2.5% for 2015, while inflation has been revised down to 0.2%. A budget surplus of 0.2% has been forecast for 2018/19, with borrowing levels revised downwards from the previous Autumn Statement forecast, to £90.2bn for 2014/15.
However, despite a £6bn windfall resulting from lower oil prices and welfare costs, the Chancellor announced that further savings to the tune of £30bn would be needed by 2017/18.
While keen to emphasise the benefits of ‘sticking to the fiscal path’, the Chancellor found room for a number of measures for individuals and businesses.
Among the headline measures for individuals was the announcement of plans to scrap annual tax returns, replacing them with ‘digital tax accounts’. The income tax personal allowance will also rise to £10,800 next year and £11,000 the following year, while the higher rate threshold will see an above inflation rise from £42,385 to £43,300 by 2017/18. Meanwhile, the pension lifetime allowance will fall from £1.25m to £1m from 2016/17.
The Chancellor also unveiled some key reforms for savers, confirming that 5m existing pensioners will be given access to their annuities from 2016. In addition, cash ISAs are set to be made more flexible from the Autumn. A new personal savings allowance will make the first £1,000 of interest on savings tax-free for most savers, while first time buyers will be offered a helping hand onto the property ladder, via a new Help to Buy ISA.
Having already confirmed the launch of a business rates review in the run-up to the Budget, the Chancellor announced that the planned reduction in the Annual Investment Allowance to £25,000 will no longer take effect from 1 January 2016. Additional news for businesses included further measures aimed at supporting regional growth and tax cuts for the North Sea oil and gas industry.
Other measures announced include a 1p cut in beer duty, together with a cancellation of September’s planned fuel duty increase, which the Chancellor claimed would cut the price of a tank of petrol by £10.