21st March 2012
Chancellor George Osborne stands to deliver today's Budget after a blow this morning from official figures indicating that public sector borrowing hit a record £15.183 billion pounds last month - close to double of the £8.875 billion in February and what economists had forecast.
This takes public sector net borrowing to £110 billion for the fiscal year to date. With the Office for Budget Responsibility (OBR) setting a 2011/12 borrowing target of £127 billion, and with March a typically large deficit month, there is now speculation whether this target will be met.
With little room to stimulate the UK economy, the Chancellor has already warned that there will be no unfunded giveaways in what is being touted as a 'Budget for working people'. Opposition leader Ed Miliband however, has already accused the Government of being more interested in cutting taxes for the wealthy who earn more than £150,000 than helping those on low incomes.
As George Osborne begins announcements, we take a look at what we might expect.
- Accelerated moves to raise the personal income tax threshold - the level in which people start paying tax - to £10,000. It is speculated that the threshold will increase to £9,000 by April 2013, taking 2 million people out of the tax loop according to Sky News. The first increase from £6,475 to £7,475 was announced in the 2010 Budget.
- A reduction of the 50p higher rate of tax for those earning over £150,000 to 45p, most likely from April next year.
- The introduction of a top rate of stamp duty tax at seven per cent on homes worth more than £2 million. Currently the top rate of tax sits at five per cent on homes worth more than £1 million, which may increase to six per cent for most expensive properties.
- The introduction of personal tax statements to be sent to every taxpayer containing a detailed annual breakdown of exactly where their income is spent, due to come into force by 2014. Welfare payments are currently the biggest government expenditure.
- An increase in the threshold at which people lose child benefit to £50,000. Parents paying the 40 per cent higher rate of income tax will therefore no longer receive child benefits.
We are covering the Budget live as it happens throughout the day.