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Budget Basics – The Budget 2012: Changes That Will Affect You

Wednesday, March 21st, 2012

So …. After all the speculation and hype, George Osborne has finally revealed all. The draw down of Afghan operations has given the Chancellor a £2.4bn bonus.

Tax
Income Tax
  • Personal allowance will rise by an extra £1,100 in April 2013 in addition to the increase to £8,105 already scheduled for this April.
  • This means you’ll be able to earn £9,205 before you pay any tax.
  • The 50% ‘high earner’ tax rate will be lowered to 45% from April 2013.
National Insurance
  • The plan to merge Income Tax & National Insurance is still likely to go ahead.
Tax for pensioners
  • The age-related additional personal allowance will be phased out to leave a single personal allowance that applies to all.
  • This will be rolled out from April 2013 and, according to Osborne, no one receiving a pension will lose out because of it.
VAT
  • Loopholes in the VAT system will be closed to reduce tax avoidance.
  • The current VAT exemptions on food, children’s clothes, books and newspapers will not be affected.
Tax statements
  • Personal tax statements will be sent to all taxpayers.
  • These will set out your average tax rate for the year, how much tax and NI you’ve paid in total and how this has funded both public spending and public debt.
Corporation tax
  • Corporation tax will be cut by 1% today in addition to the 1% reduction scheduled for April – together this will take the UK rate of corporation tax to 24%.
  • Two further cuts are scheduled for next year so by 2014 UK corporation tax will be reduced to 22%.
  • To ensure these cuts don’t benefit the banks the bank levy rate will be increased to 0.105% next January.
Other tax
  • Capital gains tax on residential properties owned by companies will be introduced.
  • A cap on tax relief for high earners will be introduced in April 2013. This means anyone that claims upwards of £50,000 in tax relief will be limited to receive a maximum of 25% of their income.
  • A general tax avoidance rule will be introduced to tackle tax evasion, details of which will be set out next year.
Benefits
Child benefit
  • The child benefit cut for higher rate tax payers will stay but changes have been made.
  • Those earning less than £50,000 will get to keep child benefit.
  • Those earning more than £50,000 will have their child benefit payments reduced by 1% for every £100 they earn over the £50k threshold.
  • Those earning more than £60,000 will not receive child benefit payments.
Housing
Affordable housing
  • The Get Britain Building scheme that extends funding to companies that build new houses will be upgraded to encourage affordable property development.
Stamp duty
  • Individual-owned residential properties worth over £2 million will be liable for 7% stamp duty.
  • The stamp duty rate will increase to 15% for residential properties that are bought by a company.
  • The government will investigate retrospective stamp duty charges for residential properties already owned by companies.
Armed forces
  • An extra £100 million will be used to improve accommodation for those in the armed forces.
  • Members of the armed forces serving overseas will also benefit from 100% council tax relief.
  • This will be funded by a £2.4 billion saving on the cost of operations in Afghanistan.
Planning permission
  • Next week the government will publish an overhaul of planning regulations that should make applications for planning permission far simpler.
Alcohol & Tobacco
Alcohol
  • There will be no change to taxation on alcohol.
Tobacco
  • Duty on all tobacco products will rise by 5% above inflation at 6pm tonight.
  • This will increase the cost of an ‘average’ pack of cigarettes by 37p.
Transport
Fuel
  • There will be no additional changes to fuel duty.
  • The Fair Fuel Stabiliser will still apply so fuel duty will go down when the cost of fuel rises and increase when fuel prices fall.
Road tax
  • Vehicle Excise Duty will increase by inflation only.
Trains
  • Rail links to the North of England will be improved.
  • The London underground and train network will be extended.
Flights
  • Additional airports may be built in the South East of England.
Employment & Education
Employment
  • Local authorities will be given the flexibility to introduce local pay rates for civil servants whose pay freezes end this year.
  • This is to bring public sector pay in line with wages available in the private sector.
  • There will be investment in manufacturing with the aim of doubling UK exports.
  • New Enterprise Zones will be introduced in Scotland, Wales and Ireland.
Education
  • A scheme that extends Enterprise Loans to young people to start and grow their own businesses will be piloted later this year.
Pensions
State pension
  • A single rate, contribution-based pension that pays a minimum of £140 will be introduced for future pensioners in the next Parliament.
  • Plans for an automatic review of the state pension age will be published this summer.
Entertainment
Sunday trading
  • Sunday trading laws will be relaxed for eight consecutive Sundays from 22nd July to coincide with the Olympics.
Broadband
  • Ultrafast broadband will be rolled out in 10 of the UK’s biggest cities.
  • A number of smaller cities will also benefit from ultrafast broadband speeds.
  • Improvements will be made to broadband connection speeds in rural areas.
Entertainment industry
  • UK companies that produce video games, animation or high end TV programmes will be eligible for tax relief.
  • A new gambling duty on games machines will be introduced.

Health Bill – PRimage comment

Thursday, July 21st, 2011

PRimage has heard that on the day that the British Medical Association votes to launch a public campaign which calls for the withdrawal of the Government’s controversial Health Bill, a survey of 500 GPs shows 85% said they had not been reassured by the government’s response to the listening exercise, with a further 62% saying their support for the reforms has not been altered by the changes to the Health Bill.

We were interested to see that many of the GPs concerns centered on the areas that as a healthcare lobbyist, Judy Viitanen believes are the very real and inherent issues around the Bill – such as increased bureaucracy in the NHS, the impact on patient care and the cost of the re-organisation.  What are your views?  We’d love to hear them.

Budget 2011 – PRimage Comment: Not bad, given the circumstances!

Wednesday, March 23rd, 2011

Spent time this afternoon trying to assess the Budget announcements …. And overall, our view at PRimage is: ‘not too bad, considering the circumstances’. The eye-catching Budget headlines are, of course, on fuel and corporation tax. Nice to finally see a little bit of light relief for the motorists of this country!

As the owner of a small business, Judy Viitanen was especially interested in the announcements relating to business – noted George Osborne signalling his desire to merge National Insurance and income tax. Osborne is ideologically a fiscal conservative, and this move paves the way for a low-tax future, by convincing Brits they pay too much tax!

Osborne also announced the Government’s Plan for Growthhttp://www.hm-treasury.gov.uk/ukecon_growth_index.htm?dm_i=3QN,E7KN,K8LG6,14ROS,1 – a package of measures aimed at supporting private sector investment, enterprise and innovation. This includes measures to increase the competitiveness of the UK tax system; reduce the burden of regulation; and increase incentives for business investment.

Key measures in the Budget for businesses include:

  • A reduction in the main rate of corporation tax by a further one per cent. From April 2011, the rate will be reduced to 26 per cent with further yearly reductions of one per cent until 2014 when it will reach 23 per cent;
  • New Controlled Foreign Company rules to allow groups based in the UK to compete more effectively with those based overseas;
  • The abolition of 43 tax reliefs whose rationale is no longer valid – following recommendations from the Office of Tax Simplification;
  • Dropping existing proposals for specific regulations which would have cost business over £350m a year;
  • £100m for local authorities to repair potholes caused by the cold winter weather;
  • Increase the rate of R&D tax credits for small and medium-sized enterprises from 175 per cent to 225 per cent by April 2012;
  • 21 new Enterprise Zones, to focus growth in specific parts of the UK;
  • Fuel duty will be cut by one penny per litre from 6pm on March 23. The April 2011 inflation-only increase in fuel duty will be deferred to 1 January 2012; the April 2012 increase will be implemented on 1 August 2012;
  • A further increase to the income tax personal allowance for under 65s of £630 to £8,105 in April 2012;
  • Additional work experience placements and additional apprenticeships for young people;
     
  • Help for homeowners facing difficulties by extending the temporary changes to the Support for Mortgage Interest Scheme for an additional year and providing £250m to support first time buyers to purchase a new-build property.

NHS Bill – A Healthy Prescription?: PRimage comment

Wednesday, January 19th, 2011

As PRimage see it there are pros and cons for this radical overhaul of the NHS. It’s a huge risk – and yes, of course it will bring massive organisational upheaval – but we should remember that the Govt needs to find 4% NHS efficiency savings a year for 4 years to keep up with rising demand!

The new policies will mean ministers essentially giving up day to day management of the service – opting instead to set annual priorities and measures of improved health outcomes for a national commissioning board. This board will performance-manage consortia of GPs to whom it will have to hand well over half the English NMS’s £100bn budget, with which to commission care locally. The worry is that this commissioning board will simply be a substitute DoH – but without a public health remit.

PRimage MD, Judy Viitanen, is a former District Councillor – and strong supporter of localism – so she’sencouraged by the policy to transfer much of public health to local authorities, who in turn will get strengthened scrutiny powers over GPs’ plans. And as a healthcare communicator and lobbyist, she is hoping that increased NHS investment in clinical care, and a focus on proactively improving health outcomes will help the treatment of cancer and other serious conditions – and ultimately bring swifter and better care closer to patients.