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Budget 2015 key points - everything you need to know

George Osborne has announced tax breaks for savers, raised the tax-free personal allowance and cut duties on beer in the final Budget before the election. George Osborne has presented 2015's Budget, the final one of this parliament, from the House of Commons.

Here is what the Chancellor announced ...

Opening remarks

Today I report on a Britain that is growing, creating jobs and paying its way. We took difficult decisions in the teeth of opposition, and today Britain is walking tall

The latest projections show living standards will be higher than when we came into office. As a share of national income, the deficit is down by more than a half.

We set out a plan and that plan is working. Do we turn to the chaos of the past or return to plan that is working for you.

We will use whatever resources we have to get the deficit down. This is a Budget that takes Britain on one big step on the road from austerity to prosperity.
 

Growth and economics

Growth in 2015 will be 2.5pc, according to the Office for Budget Responsibility. This compares to 2.4pc predicted in December and 2.1pc predicted a year ago.


The economy will expand by 2.3pc for the next three years after that, then 2.4pc in 2019.

Inflation is due to fall to 0.2pc this year. In December it was forecast to be 1.2pc this year.


Borrowing and spending

The Government will increase the number of long-term gilts to be sold, to "lock in" low borrowing rates. Many historic debts will be paid off. But Osborne says Gordon Brown's will take a lot longer.

Lower borrowing will be used to pay down the debt, not for a giveaway, Osborne said.

Debt as a percentage of GDP will fall in 2015-16 for the first time since 2001. It will be 80.4pc in 2014-15 and 80.2pc in 15-16. By 2019-20 it will have fallen to 71.6pc.

Public borrowing forecasts have been revised down from £91.3bn to £90.2bn in the current fiscal year since December, while 2015-16's numbers have been cut from £75.9bn to 73.5bn. Then £39.4bn, and £12.8bn in 2017-18.

In 2019-20 there will be a £5.2bn surplus, and in 2019-20 £7bn.

As a percentage of GDP, the deficit will be 5pc this fiscal year, then 4pc, 2pc, and 0.6pc. After that, a 0.2pc surplus in 2018-19, then 0.3pc the year after.

Spending cuts of £30bn by 2017-18 come from £13bn government departments, £12bn of welfare savings and £5bn clamping down on tax evasion and avoidance.


Jobs

Unemployment will fall from 5.7pc now to 5.3pc at the end of 2015. In December, the OBR forecast it would be 5.4pc at the end of this year, and a year ago it said 6.5pc.

This is down 3 percentage points from what the Coalition inherited. 1,000 jobs have been created a day, Osborne says.

Minimum wage to rise to £8 by the end of the decade.

 

Savings and Pensions

The pensions lifetime allowance, which Osborne says is unsustainable, will be cut from £1.25m to £1m. It will affect less than 4pc of people, the Chancellor says.


Savers won't have to pay any tax on interest on the first £1,000, or £500 for higher-rate taxpayers

New Help to Buy ISA, every £200 saved leads to a Government
top up of £50.

Other ISAs will be made more flexible, to allow savers to keep tax benefits when they take money out and put them in.

 

Tax

Personal tax free allowance rises to £10,800 next year and £11,000 the year after. A tax cut from 27m people.

40p rate climbs to £43,300 in 2017-18.

Osborne says he wants to eventually raise tax free allowance to £12,500 and 40p rate to £50,000.

Corporation tax cut to 20pc from next year, and simplified to cut relief on foreign branches.

Tax loopholes being closed will raise £3.1bn.

Annual tax return abolished. (see next column).

 
Tax Returns

End-of-year paper tax returns will be scrapped in favour of "real-time" online accounts by 2020, Chancellor George Osborne announced.

The Budget confirmed plans to switch to "digital tax accounts" by 2020, ending the annual rush to file a tax return.


Instead, individuals and small businesses will submit accounts throughout the year via computer, tablet or smartphone.

Mr Osborne called it "a revolutionary simplification of tax collection".

People will be able to pay their tax at any point throughout the year.

They will also be able to spread the cost by paying in instalments.

Taxpayers will be given a login and password so they can submit tax information regularly, making tax bills more closely related to current performance.

The online accounts will show how your tax is calculated, as HM Revenue & Customs also updates information available to it - for example, from employers, pension providers and banks.

Both businesses and individuals will be able to link their own accounting software and their bank accounts to the digital tax account.

This will remove the need to submit an end-of-year return and the requirement to pay an annual tax bill in one go.

The switch is expected to start with five million small businesses and the first 10 million individuals in early 2016.

By 2020, businesses should be able to link their accounting software to their digital tax account, so they can feed in information directly.

People who wish to continue filing an annual paper return will be able to do so.


Duties on fuel, alcohol, tobacco and gaming

Cancel fuel duty increase for petrol. Osborne says £10 off a tank with the Tories.

Cutting beer duty by a penny off a pint, cider duty down 2pc, whisky and spirits by 2pc, wine duty frozen.

No changes on gaming or tobacco.


Exports

Double UK Trade and Investment's resources for Britain's exports to China.


Energy/North Sea

£1.3bn of support for the oil and gas industry through a series of tax cuts to petroleum revenue levies, supplementary charges and a tax allowance.

This will increase production by 15pc by the end of decade according to the OBR.


Banks

Launches a sale of £13bn of UK Asset Resolution mortgages.

This is the "bad bank" of bailed out Northern Rock and Bradford & Bingley.

£9bn of Lloyds shares will be sold this year.

The bank levy will be raised from 0.156pc to 0.21pc,
raising £900m a year.


Regional initiatives

A comprehensive transport strategy for the North to help create a Northern Powerhouse.

Business rate receipts devolved to Manchester, and offer to do the same to Cambridge.

Eight enterprise zones across Britain, with new ones in
Plymouth and Blackpool.

 

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