Synopsis: George Osbourne has announced that another Budget will take place on 8 July and will reveal how the government plans to cut £12bn from Britain’s welfare bill.
Date posted: Monday, May 18, 2015
Given the timing of the March Budget, the ending of the last Parliament and the election it was inevitable that;
(i) some Budget proposals that were not ‘legislated’ in the Finance Act would need a second Finance Bill, and
(ii) post-election there would be some form of second Budget or Spending Review.
Over the weekend George Osbourne announced that a second Budget will indeed take place on 8 July.
He said, ‘On the 8th of July I am going to take the unusual step of having a second budget of the year – because I don’t want to wait to turn the promises we made in the election into a reality … And I can tell you it will be a budget for working people.’
So exactly what does he have in mind?
He has said he will look to make the changes laid out in the Conservative Party’s manifesto, including spending cuts and reforms to welfare and pensions.
Key measures are likely to include laws to prevent rises in income tax, VAT and National Insurance – the so-called ‘triple-lock’. So he may give more details of how he plans to raise the tax-free personal allowance to £12,500 and increase the higher-rate tax threshold to £50,000.
The Conservative party have also pledged to introduce a ‘main residence nil rate band’ (of £175,000) which would be available in addition to the existing nil rate band in circumstances where a main residence is left to a direct descendant of the deceased. This additional nil rate band would be reduced by £1 for every £2 that the property value exceeds £2m until it is extinguished at £2.35m.
Other measures may also include details of doubling free childcare allowance for three and four-year-olds to 30 hours, opening more free schools and lifting the cap on university places.
No doubt we will learn more about the potential content of the Budget in the time leading to 8 July and, as it’s a Budget a few surprises shouldn’t be ruled out!
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