2012 Budget Summary
Julian Smith, Private Client Services Partner
This has to go down as one of the most openly talked about Budgets in history.
The nature of coalition government, and the decision of the two parties to effectively ‘trail’ in advance the announcements that played best to their respective supporters, meant that there was almost a sense of anti-climax when the Chancellor revealed some of his Budget measures.
So no surprise then that the 50p top rate of tax is to be cut to 45p from April 2013 while the personal income tax allowance is to be raised to £9,205 from the same date. Both measures were ‘leaked’ in advance.
By the same token it will be welcome news to households where one person has an income of more than £50,000 that child benefit will only start to be phased out at this level. Only those earning more than £60,000 will now lose the entirety of the benefit. Once again this proposal was reported in advance.
There’s potentially good news for pensioners with age-related allowances to be simplified over time, starting April 2013, with the creation of a single personal allowance for all. The Chancellor stresses no pensioner will lose in cash terms but many will be watching this closely and, perhaps, a little nervously.
Above all this was a Budget for business with the main rate of corporation tax cut to 24 per cent from next month and falling to 22 per cent by 2014. That has to be good news for companies who wish to reinvest some of their profits.