Chancellor announces budget that rewards work

| March 21, 2012 | 0 Comments
Chancellor announces budget that rewards work

Delivering his third Budget, Chancellor of the Exchequer George Osborne, said that it would help those who aspired to do better for themselves and for their families.

‘Britain is going to earn its way in the world’ he said.

He promised far reaching tax reform, creating a system that was simple to understand for ordinary taxpayers and more competitive for business.

More specifically, the Chancellor confirmed the news leaked yesterday that the 50p top rate of income tax, which is paid on earnings over £150,000, will be cut to 45p from April 2013.

Other taxes on wealth will be introduced and along with measures to curb tax avoidance, these are expected to raise five times as much as the 50p tax rate.

The top rate had been expected to raise £3bn, but it has raised just a third of the expected amount and is believed to reduce competitiveness.

For low-earners, the Chancellor announced an increase in the income tax allowance to £9,205.

Mr Osborne revealed positive news on the economy, with a slight increase in the growth forecast for the UK economy this year from 0.7% to 0.8%

However 2 per cent growth is expected in 2013, slightly lower than earlier forecasts of 2.1 per cent.

The Chancellor announced that the government is on schedule to reduce the UK’s deficit by 2016/17 and that the Independent Office for Budget Responsibility believes the country will avoid a ‘technical recession’.

There will be a larger than expected cut in corporation tax to 22p over the next three years, to help attract foreign investors.

Prior to the Budget, the Office for National Statistics revealed that Britain’s budget deficit almost doubled in February to £15.2 billion due to lower tax receipts and an 8.3 per cent increase in spending.

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