The Chancellor will deliver his Budget speech for 2013 on 20th 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 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, so be sure to check back regularly. I will also announce changes on twitter so follow me at @money2themasses
On Budget Day itself I will provide LIVE updates via Twitter and, of course, after the event I will provide full analysis of how the budget will affect you.
The Chancellor is under pressure to provide a clear path to recovery as he needs to engender business and consumer confidence. He can't afford to have any more bright ideas backfire on him, such as the 'pasty tax'.
With the UK losing its AAA credit rating pressure is on the Government to drive for growth rather than focussing totally on cutting costs. There is therefore talk of George Osborne increasing the Bank of England's powers in time for the arrival of the new Governor. This may include a greater flexibility regarding its inflation target as well as extending its remit to include targeting unemployment rates, much like the Federal Reserve in the US. His aim is to avoid making a u- turn on his austerity plan by instead trying to encourage economic growth through looser monetary policy at the Bank of England.
Latest Budget predictions
CGT - there are calls to make across the board cuts in Capital Gains Tax. According to the Adam Smith Institute the increase in the tax rates implemented in 2008 have produced no increase in revenue. CGT is a voluntary tax, as it is only paid when assets are disposed of, resulting in people holding on to assets when the rates are increased. Going back to pre-2008 rates is a long shot but we may we may see a lift in current tax free amount above the normal increase in line with CPI.
Corporation Tax - We may see a further 1% cut in Corporation Tax as Osborne continues his drive to make the UK more 'business friendly'.
'Granny Tax' - Plans to scrap the higher personal tax allowance for over 65s in April has come in for some intense criticism, but reversal on yet another one of the Government's tax ideas will not be done without a great deal of thought.
Personal Allowances - The Coalition has signposted their desire to eventually raise the personal allowance to £10,000. From April individuals will have a personal allowance of £9,440 so maybe a jump nearer to the £10,000 target could be on the cards.
National Insurance - The only likely change is in relation to the self-employed. Currently they pay less NI then the employed but receive a reduced entitlement to the state pension. With the proposed introduction of a flat rate state pension the self-employed need to be paying the same amount as everyone else.
Duty on Alcohol
Beer Duty Escalator - Every year the duty on a pint of beer is raised by 2% above inflation and now stands at one third of the cost of a pint. The Taxpayer's Alliance is calling on the Government to reduce this tax. But there are rumours that the Government will perform another embarrassing u-turn and ditch the proposed minimum 45p per unit price for alcohol.
House Building - Attempts so far to breath life into the property market have failed and there is still a desperate need to increase house building. We can expect some new policies to kick start the market but these need to be better thought through than the previous efforts. Also there have been calls to extend the NewBuy scheme to pre-existing housing and not just new builds for first time buyers. But the latest rumours are that this may go a stage further with the Department for Communities and Local Government (DCLG) apparently working on a package expected to offer help to second steppers via the NewBuy scheme.
There has been speculation for quite a while that there could be various changes to pension legislation. These changes could affect - Cash Free Lump Sum, Annual allowances and Tax relief on payments. The 'noise' around pension changes has seemed to quieten down since the Autumn Statement so any changes would produce a shock on Budget Day.
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