BUDGET: Chancellor announces tax changes
The Chancellor has said that the 2012 Budget is designed to support economic growth, and a sustainable economy.
2012 budget designed to support economic growth
Government introduces tax system reforms to support economic growth
New taxation plans aim to create a more sustainable economy
This week’s budget forms part of the coalition Government’s strategy to address the economic challenges facing the UK, restore stability and support growth. A planned net tax increase of £29 billion is planned to help consolidate £155 billion per year by 2016. Another aim of the reforms is to create a simpler and more sustainable tax system.
New taxation plans include:
- Reducing the 50% additional income tax rate to 45% for top earners from 2013.
- Households where someone earns over £60,000 will not receive child benefit. Those where an individual earns over £50,000 will lose 1% of their child benefit for every extra £100 earned over £50,000.
- An increase in tax on residential properties over £2 million through Stamp Duty Land Tax.
- Limit on uncapped income tax relief.
- Problems highlighted within the VAT system will be cleared up.
- Changes in gambling taxation will be introduced to include all profits made from UK-based customers.
- Corporation tax is to diminish to 23% by April 2014.
- Age-related income tax allowances will be frozen from April 2013.
- A grant for local authorities that reduce or freeze council tax.
The Government also has plans to make the tax system more transparent, with around 20 million taxpayers receiving a Personal Tax Statement from 2014. An additional £325 million has been put aside to help reduce fraud, which the Government claim will save £1.4 billion each year.