2015 Budget predictions?
George’s final Budget (of this parliament anyway, we can’t guarantee whether he’ll be here or not come May) will be delivered to the House tomorrow, and the grapevine is unusually light on rumours as to what surprises might pop out of that red box. However, the Chancellor himself has promised "no giveaways, no gimmicks" in this week's Budget, but here are a few things we think we might see tomorrow, that might will improve your pocket’s prospects.
This time around, falling inflation and lower interest rates mean payments on the national debt will be reduced, which could give the Chancellor room to provide a tax break for middle-income families- the OBR is widely expected to announce a £6bn cut in government borrowing for 2015-16. However, George has to balance the extra wriggle room he has available, with whether he wants to save the juicy stuff for election manifestos instead...
What he could do is raise the personal income tax allowance to £11,000, a £500 increase on the previously announced £10,500 from this April. People earning below that amount every year wouldn't have to pay any income tax at all, and everyone else would save a little bit on their annual tax bill.
Other potential changes affecting individuals could see an increase in the inheritance tax nil rate band- bearing in mind earlier promises to get it to £1 million by 2020, which would be good news for all those owning property in London and the South East. However, on the flip side, it has been suggested that the Chancellor might look to raise cash by announcing the withdrawal of private residence relief on houses worth more than £2 million. Under current rules, UK residents don’t pay capital gains tax when selling their home, but it could be limited to provide relief only on where proceeds are under £2m. This would also take the wind out of Labour’s mansion tax sails in an election campaign face off.
Finally, to help low-paid workers, George could raise the level at which National Insurance contributions kick in. This would help lower earners, as this has become a bigger issue for low earners than their income tax while the NI threshold remains so much further behind the income tax personal allowance.