It's that time of the year again. The time when you wonder how the Chancellor George Osborne will affect your live in the coming tax year.
There is a lot of speculation already about how added, removed or changed measure in the Budget will have your pockets running scared across the country.
As always, we will be providing full coverage right here at TaxPenny news, as well as our dedicated budget website - if you haven't already taken a look do so now. It incorporates a personal budget planner with a Government budget calculator - showing you if you will be better or worse off. This will be updated on the day to help you see the changes in a quick and easy manner.
So, what are the predictions?
Appeal to the lowest paid
- Increasing the under 65's personal allowance to £8,105 for next year is already confirmed, but there is a possibility of a announcement to fast track the expected increase to £10,000 to April 2015.
- To fast track would mean an above inflation personal allowance rise for 2013/2014.
Appeal to top earners
- Scrapping the 50 percent top rate of income tax is a possibility. It was introduced as a temporary measure by the Labour Government in 2010. With the coalition still fearing a backlash, it is expected that rather than remove the rate, a distinct path for it's removal will be announced.
- Cutting tax relief for pension contributions made by higher earners is likely. This limit has already been reduced drastically from £255,000 to £50,000 from the 2011/12 tax year. The Government may choose to limit top earners (above £150,000) to only 20% tax relief.
- Lib Dem ministers have been arguing that in order to remove the 50 percent tax, a replacement tax on wealth should be put in place. Here comes forward the mansion tax. Anyone owing a property worth north of £2 million would pay a 1 percent mansion tax - at least that is Vince Cable's proposal for it.
- Currently the opposition to this is the implementation cost and effort due to problems finding those who are eligible to pay it.
Fuel Duty Reductions
- In the Autumn statement it was announced that the fuel duty rise of 3 pence, due in January 2012, would deferred until August 2012. At the point it would be introduced along with added inflation-linked rise of 5 pence would take fuel price at the pumps up by a minimum of 8 pence a litre.
- Will there be a reduction in these numbers? Depends on whether the Chancellor can find any money to pay for it. £4 billion was spend last time to defer the rises.