The Budget

Today’s budget was a very interesting one and had many attention grabbing details, here’s the outline of the major points:

·         The 50p rate of tax will be cut to 45p

·         Corporation tax will be cut from 24p to 22p

·         The tax threshold will be raised to £9,205

·         Stamp duty will go up to 7% on houses worth £2 million +

·         A loophole will be closed; previously if you bought a £2 million + house through a foreign company you wouldn’t have to pay stamp duty. Now that costs 15%.

·         Child benefit will be phased out between £50,000-£60,000

·         The “granny tax” whereby pensioners could lose £85 this year

The biggest storm is over the cutting of the 50p rate. As Ed Miliband said, it is the day the phrase “We’re all in this together” died, he also made the valid point of asking the cabinet to “put up their hands” if they would benefit from this new tax (despite it being a cabinet of millionaires nobody put their hands up). Politically this was a dangerous move for the government; polls consistently show that people do not support cutting the 50p rate, even amongst Conservatives. They have three years before the next elections to prove that this measure has been a success, if it is then it will benefit them, if not then they’re in for a rough time at the next election.

Another major part of the budget is that the tax threshold has been raised to £9,205. What this means is that you will no longer pay any tax on your first £9,205 you earn. This is great for people at the bottom end of society and will significantly help many families that are struggling.

The corporation tax cut will probably be good for business; this rate means that the UK has an extremely low corporation tax for a large, developed country. What George Osborne wants to do is to install a sign over Britain saying, “We’re open for business”, it could work and I hope it does for the sake of our economy.

The stamp duty change probably won’t raise a large amount of money, but is good nonetheless. I’m glad to see effort made by the government to close tax loopholes and I hope they continue to do so for the rest of the parliament, closing tax loopholes are a great way of getting more money for the exchequer without causing much hassle or public anger.

George Osborne holding the budget