The Chancellor will deliver his Budget speech for 2014 on 19th March and already speculation is mounting over what will be announced and how this will affect your finances.
So below I've compiled the latest Budget 2014 predictions of what George Osborne may announce in his Budget speech. These predictions will be updated regularly right up to Budget Day as and when more information is leaked or speculated upon. Make sure to check back regularly and follow me on Twitter at @money2themasses where changes will also be announced.
On Budget Day I will provide LIVE updates via Twitter and I will also provide a full analysis of how the budget will affect you.
Economy
In December 2013 the Chancellor predicted a growth rate of 2.4% for 2014. The IMF recently endorsed this growth rate and gave a very positive assessment of the outlook for the UK. The anticipated growth rate of 2.4% is higher than any other European country and is now growing at the fastest rate since 2007.
Inflation is down to around 2% with unemployment falling rapidly to 7.1% so the Chancellor will be in a very upbeat mood when he stands to deliver this year's Budget speech.
Latest Budget 2014 predictions
Welfare
- The Chancellor will still be keen to reduce the welfare spend but it is difficult to see where further cuts will be made especially as the next general election is on the horizon.
Housing
- With mortgage lending at the highest level in six years and house prices rising, quickly in some areas, the Chancellor will be keen to point to the success of government backed schemes in breathing life into the housing market. What will be interesting is whether an announcement will be made regarding the end of these schemes or maybe a reduction in the upper lending limit.
- With the current average house prices now around £250,000 there may be a review of the Stamp Duty thresholds. Moving the 3% rate from £250,000 to £300,000 would cost the government around £800m but would be a real vote winner particularly the South East.
Interest rates
- Although an announcement has already been made indicating no interest rate rise is imminent that date must be getting ever close. It will be surprising if the Chancellor does not make a reference to interest rates in his speech but I don't expect any surprises.
Income Tax
- An announcement has already been made concerning the raising of the personal allowance up to £10,000 from 6th April 2014 but this may be increased in the Budget to £10,500. This allowance is set to increase by the CPI from 2015/16 onwards. It is unlikely that any further increase will be announced in this budget.
- An increase to the minimum wage could be announced to as an alternative to raising personal allowances further.
- A rapid rise in the number of people now paying higher rate tax has resulted in calls for the thresholds to be reviewed. It is predicted that 20% of taxpayers will be paying the higher rate by 2016/17.
- A transferable personal allowance will be introduced from 6th April 2015 when it will be possible to transfer up to £1,000 of an individuals personal allowance to a spouse or civil partner providing the receiver is not a higher rate tax payer.
CGT
- In the Autumn Statement it was announced that measures would take effect from April 2015 to levy capital gains tax on non-residents disposing of UK residential property. More details on these proposals are expected to be announced.
Pensions
- The reduction in the lifetime allowance to £1.25m has already been announced so further changes are not expected.
Savings
- There is some speculation that there may be changes to the ISA rules with a possible cap on the total amount held in these tax-free products.
Corporation Tax
- The latest cut in the rate of corporation tax takes effect from 1st April 2014 when the rate falls from 23% to 21%, the rate will drop further to 20% from 1st April 2015.
Tax Simplification
- Reviews have been carried out by the Office of Tax Simplification into various aspects of taxation. Announcements are expected regarding the reviews which cover employees benefits and expenses among other things.
NIC
- The removal of employer NIC payments for under 25 year-old employees is due to commence in April 2015 but this may now been bought forward to this April.
Childcare
- A new system for offering tax relief on childcare will take effect in 2015, more details of this are likely to be announced.
Fuel
- Likely to announce a freeze on the the excise duty on petrol and diesel
