Budget 2012 favours low-income earnersCurrent affairs
Chancellor of the Exchequer George Osborne today announced cuts on taxes involving high earners and companies, whilst providing lower earners with a financial support to ease their economic condition, announcing a budget that “rewards work”.
In his speech, the Chancellor revealed an increase of £1,100 in personal tax allowance next April, and the eradication of top rate tax of 50p to 45p.
Osborne backed the rise in threshold to £9,205, which takes the coalition closer to the goal of a £10,000 allowance, claiming it would help 24 million low-paid workers by making them £220 a year better off.
Speaking of the cut from 50p to 45p, George Osborne reassured the country that the Treasury would receive “five times more money each and every year from the wealthiest in our society,” contrary to the one-third of the £3bn they had forecast to raise.
Mr Osborne branded tax evasion and aggressive tax avoidance as “morally repugnant” and unveiled his hopes of raising £1bn over the next five years via anti-avoidance measures. He also promised a general anti-avoidance rule to counter aggressive and “artificial tax avoidance”.
The cut-off point for receiving child benefit was also raised from £42,475 to £60,000; they will only be withdrawn at 1% for every extra £100 if someone in the household has an income of more than £50,000.
Targeting the aging population, Mr Osborne said he would freeze income tax allowances for most pensioners in cash terms, and promised a new “single tier pension” of £140 a week to replace the state second pension.