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Sam Dowling’s summary of the 2012 Budget

The main Budget report can be seen here, but I have picked out a few general highlights below. See also Andy Scott’s budget summary here.

  • Top income tax rate will be reduced to 45p in the pound from April 2013.
  • The point at which people start paying income tax will be raised to £9,205 from April 2013.
  • A single tier pension, at a minimum of £140, will be set.
  • Stamp-duty rate on properties worth more than £2 million via companies will be raised to 15 per cent. Stamp duty on individual-owned properties worth over £2 million will be set at 7 per cent.
  • Bank rate levy will be increased to 0.05 per cent.
  • Confirmation that Edinburgh is among ten UK cities to receive investment for super-fast broadband and wi-fi.
  • Dundee, Irvine and Nigg in Scotland are among the locations planned for new enterprise areas.
  • Tax breaks for video games and premium TV shows.
  • Corporation Tax is being cut to 24 per cent in April, having already been cut to 26 per cent from 28 per cent. This will be cut again to 22 per cent by 2014.
  • Anomalies in VAT such as on some foods and drinks will be eradicated, but some exemptions on food, children’s clothes, books and newspapers will be kept.
  • All-day trading will be allowed for eight Sundays starting on 22 July to coincide with the Olympics and Paralympics.
  • Package of tax changes to ensure maximum value from oil and gas extraction.
  • £3 billion new oil field allowance to open up fields west of Shetland Islands
  • The cost of funding the UK’s operations in Afghanistan until 2015 will be £2.4 billion lower than previously forecast.
  • Extra £100 million of improvements in the accommodation of armed forces and their families.
  • The unemployment rate is forecast to fall, with claimant counts falling too.
  • Inflation will fall to 1.9 per cent by next year.
  • The Office for Budget Responsibility (OBR) has revised up growth forecasts to this year to 0.8 per cent this year and 2 per cent next year.
  • Borrowing this year to come in at £126 billion, down from November forecast of £127 billion.
  • OBR says UK will avoid technical recession with positive growth in first quarter of 2012.
  • The salary threshold at which Child Benefit stops being paid will be set at £50,000, rather than about £42,000. The withdrawal will be gradual: 1 per cent of benefit for every £100 earned.

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