Personal Tax Allowance
The Liberal Democrats have ensured this is a budget for the millions not for the millionaires, delivering a £3.5billion tax cut to average working people.
This means that 21m basic rate taxpayers will get an extra £220 cut in their income tax bills and a further 840,000 of the lowest earners will be taken out of paying income tax altogether. Those on minimum wage will see their income tax bill halved. See attached for a spreadsheet showing what this will mean for the residents in your area.
Tycoon Tax Measures
HMRC, supported by the OBR, estimate the cost of reducing the higher rate income tax from 50p to 45p to be £100m. In return the budget includes a number of measures that will raise five times as much from the super-rich:
. Capping total tax reliefs at 25% for those with incomes over £200k
. A higher (7% up from 5%) rate of stamp duty for mansion purchases (residential properties worth more than £2m). This equates to a minimum of £40,000 extra on mansion sales.
. 15% stamp duty for mansion purchases (residential properties worth more than £2m) by companies, plans to consult on annual charge for these properties.
. Making sales of residential properties by companies liable to Capital Gains Tax
Age-related Allowance and our record on pensioners
The extra personal tax allowance (currently £10,500) for over 65s will be frozen until the allowance for working age earners is brought up to the same level. Measures Lib Dems have introduced to help pensioners:
· The Government has guaranteed that pensions will rise in line with either wages, inflation or 2.5 per cent – whichever is highest.
· The promise, called the “triple lock”, restored the link between pensions and earnings which was cut by Thatcher’s government in the 1980s. State pensions will increase by £5.31 per week to £107, while pensions for couples will rise by £8.50 to £171.85 per week.
· There is also a boost for those who claim pension credit, an extra benefit for less well-off retired people. This will increase by £5.35 a week.