News - 2009 Pre-budget report
December 14th 2009
What may be Alisdair Darlings last pre-budget report was also a pre-election
one so the pain was muted.
The chancellor tinkered about with a smallish increase of 0.5% in NI
contributions on incomes over £20,000 per annum from April 2011
expected to raise £3 Billion and a cap on state contributions
to public sector pensions another billion. Public sector pay increases
will be capped at 1% for two years from 2011.
VAT goes back up to 17.5% from 1 January 2010.
In a crowd-pleasing move that will raise little real revenue, bankers
bonuses over £25,000 will be subject to a 50% tax.
The chancellor estimated public sector borrowing of £178 billion
in 2009 (estimate revised up by £3 billion), £176 billion
in 2010 and £140 billion in 2011, reducing to a mere £96
billion in 2013.
Total UK public sector borrowing for 2009 works out approximately as
follows:
Per Year £178,000,000,000
Per Month £14,833,333,333
Per Week £3,423,076,900
Per Day £487,671,230
Per Hour £20,319,634
Per Minute £338,660
Per Second £5,644
or around £253,980 in the time it took you to read this article!
April 22nd 2009
Worst performance ever? It's interesting to see how the predictions
below match up with the reality that is the UK economy in spring 2009.
The worst figures for the economy since 1979 when Jim Callaghan was
at the helm and we were driving home in our Ford Cortina to watch Alec
Guiness in 'Tinker, Tailor, Soldier, Spy'!
Figures from the Office of National statistics show that GDP for the
year to the end of March was down by 4.1%.
UK GDP has now shrunk for three quarters in a row and the decline over
the last three months in particular has been a quite gruesome 1.9% with
manufacturing declining by over 6% during the same period. Alistair
Darling forecast a shrinkage of 3.5% in 2009 in his budget speech followed
by growth of 1.25% in 2010 and annual growth of 3.5% in following years.
Public borrowing was forecast to increase to £175bn in 2009.
Alistair Darling announced Alcohol taxes up 2%. Tax on tobacco up by
2% - equivalent to 7p on 20 cigarettes. Fuel duty will rise by 2p per
litre from September, then by 1p a litre above inflation each April
for the next four years. A 50% tax rate was bought in for those on over
£150,000 a year together with changes to tax relief on pensions
for high earners.
To help a beleagured motor industry, a £2,000 trade-in was announced
allowing you to swap out your old car providing it's over 10 years old
and you've owned it for a year.
News - 2008 Pre-budget report
November 24th 2008
Whew! a few changes since the 2007 pre-budget report (PBR) below. Revised
predictions say the economy could shrink by up to 1.25% next year with
public sector borrowing hitting a whopping £118,000,000,000 (£118
Billion).
In response to the ongoing financial crisis and recession. Alistair
Darling announced a package of measures designed to help re-start the
economy. Headlining the speech was a VAT cut of 2.5 percentage points
from 17.5% down to the E.U.'s minimum allowed level of 15%.
Most observers regard this a classic example of 'too little, too late'
as it's difficult to see how a 2.5% cut in VAT will get the nation spending
again when retailers are already discounting by up to a third.
The chancellor also announced an increase to 45% in the tax rate on
earnings over £150,000 and an increase in National Insurance Contributions
of 0.5% . Both increases will take effect from 2011.
Last Year's Pre-budget report
October 9th 2007
Chancellor of the Exchequer Alistair Darling presented the pre-budget
report (PBR) and spending review to parliament this afternoon. He cut
goverment growth forecasts for 2008 by half a percent to 2.0 - 2.5%,
in the light of the recent slow down in the economy, although some observers
think that the 2.5 - 3% still predicted for 2009 may be too optimistic.
He also targeted some of the tax loopholes currently exploited by the
super-rich executives of private equity firms - from next April the
government will remove capital gains tax taper relief, which can be
as low as 10% (when for example selling a company which has been owned
for more than two years) and replace it with a flat rate of 18%.
Mr. Darling announced a further review of non-doms (people who live
in the UK but consider other contries as their domicile for tax purposes),
but in the form of a £30,000 charge only after seven years residence
in the UK.
The Chancellor also took a leaf out of the conservatives book by doubling
the inheritance tax threshold for married couples and those in civil
partnerships to £600,000 immediately, with an additional rise
to £700,000 in 2010. More good news for homeowners was his announcement
of budget changes to encourage longer fixed-rate
mortgages - up to 10 years.
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