Last month Chancellor George Osborne announced the date for his budget – 8th July – and yes, you’d be right in thinking that this is the second budget this year. But this is an emergency financial statement following the Conservative success at last month’s election, with the plan to follow up on changes announced in their manifesto including measures regarding income tax, National Insurance and VAT. But what could this July budget mean to you?
March 2015 Budget
March’s budget held comforting news for many people and reduced the pressure on purse strings. Key measures included:
- Tax-free personal allowance increasing from £10,600 in 2015-16 to £10,800 in 2016-17 and again to £11,000 in 2017-18.
- Transferable tax allowance for married couples going up to £1,100.
- No more annual paper tax returns!
- A new personal savings allowance with the first £1,000 interest on savings income now tax-free for basic rate taxpayers.
- A new ‘Help To Buy’ ISA for first-time buyers topped up by the government to the tune of £50 per £200 saved towards a deposit.
- Class Two National Insurance contributions abolished in the next Parliament for the self-employed.
With petrol duty frozen and no increase in September and the cost of a pint falling by 1p, and the news that unemployment had fallen, you’d be forgiven for asking “Why another budget?” But another budget there is going to be; so, what could the predicted new measures mean to you?
July 2015 Budget
There were certain measures in the Conservative Party manifesto that are yet to be announced in full and these include:
- Pension and welfare reforms.
- Laws to stop income tax, National Insurance and VAT rising.
- Higher rate tax thresholds.
- More increases to tax-free personal allowances, to name but a few.
In Osborne’s announcement of the new budget date, he expressed that this budget will be focusing on ‘working people’; the Treasury goes further by hinting that this budget is likely to set out plans to honour savings that the Party promised in their campaign for the election.
This latest budget comes in the wake of recent upward activity in the construction industry. Housebuilding, a key indicator of the nations’ economic growth and consumer confidence, is on the rise. Coupled with interest rates remaining at their lowest, the prediction that incomes will rise more quickly than inflation and more people finding employment – unemployment is at a seven-year low – there is every reason to believe that 8th July could be directly beneficial to you, and your pocket!
Pensions are significantly linked to income; the majority of workers have a pension of some sort nowadays but with current tax levels on your pensions (and your savings), many will be left short on retirement. As for welfare reforms, surely it is about time these are brought back in line to help the people that really need the Government’s help and support.
In fairness to Osborne, he went some way to loosening the ‘tax grip’ on our incomes by increasing the personal allowances, and helped the self-employed sector with the abolition of the Class Two National Insurance contributions in the last budget. It will be interesting to see if he is prepared to go further – we’ll keep you updated.