Highlights from George Osborne's 2015 Budget

George Osborne heralded the 2015 Budget as “the Budget for Britain; the comeback country”, stating the north has grown faster than the south in the last year, demonstrating “true national recovery”.

He highlighted “the great county of Yorkshire” for creating more jobs than the whole of France, and claimed Britain’s economy grew faster than any other advanced major economy in the world.

For the third consecutive year the Chancellor cut beer duty by 1p, with duty on both cider and whisky down 2p, alongside a freeze on wine duty.

Simon Theakston, executive director at North Yorkshire brewery T&R Theakston, in Masham, said: “This reduction recognises the importance of the British brewing industry.”

Welcoming the announcement that plans to increase fuel duty in September have been scrapped, with a duty freeze imposed instead, Keith Emmerson, who runs TaxAssist Accountants in York, said: “Cars and vans are an essential part of many local businesses, particularly those which deliver products and services to our homes, so another freeze on fuel duty is very welcome.”

Stating people pay enough tax when they earn money and that they shouldn’t then be taxed again when they save it, the Chancellor increased annual savings limits for ISAs to £15,240, also making them “fully flexible” so people can withdraw and deposit in the same year.

The first £1,000 of interest earned on savings will now also be tax free.

Paul Kettlestring, financial adviser at NFU Mutual in Pickering, said: “This is great news for people who may need to dip into their tax-efficient savings for emergencies.”

The average earner is set to be around £900 a year better off after the amount people can earn before being taxed is set to rise to £11,000 by 2016-17. The Budget outlined further support for first-time house buyers with new Help to Buy ISAs which will see every £200 saved for a deposit topped up with £50 from Government.

Simon Usher, deputy managing director at York-based Persimmon Homes Yorkshire, said: “As a housebuilder, we welcome any move from the Government that get people on the housing ladder.”

The Budget was largely dismissed as a “minimalist affair” by many business groups and leaders, with the headline announcement being the abolishment of paper annual tax returns.

Nick Scull, partner and head of tax York accountants Garbutt & Elliott said: “It is no doubt a popular move, although it will take some years to become reality.”

Simon Williams, North Yorkshire regional chairman for the Federation of Small Businesses, welcomed the Chancellor’s promise of a review into business rates as being “long overdue”.

He said: “When complete, it must deliver tangible benefits to businesses and not end up as just another report that sits on the shelf.”

The Budget at a glance

Here are the main points of Chancellor George Osborne’s Budget:

ALCOHOL, TOBACCO, GAMBLING AND FUEL

• Beer duty cut by 1p a pint and cider by 2p. Two per cent cut in excise duty on Scotch whisky and other spirits. Wine duty frozen

• No changes to tobacco and gambling taxes, with tobacco duties set to rise by two per cent above inflation, equivalent to 16p on a packet of 20 cigarettes.

• New “horse racing betting right” to replace the 50-year-old horserace betting levy on British bookmakers

• Petrol duty frozen - September’s planned increase cancelled

PENSIONS

• Lifetime allowance for pension savings that can be accumulated free of tax will be cut from £1.25m to £1m from April 2016, saving £600m annually

• Pensioners to be able to trade in their annuities for cash pots, with the 55 per cent tax charge abolished and tax applied at the marginal rate

• Widows of police officers and firefighters who choose to marry again will see their existing pensions protected

SAVINGS

• New personal savings allowance - first £1,000 interest on savings income to be tax-free for basic rate taxpayers and £500 allowance for 40p tax ratepayers.

• Annual savings limit for ISAs increased to £15,240

• “Fully flexible” ISA will allow savers to withdraw money and put it back later in the year without losing any of their tax-free allowance

• New “Help to Buy” ISA for first-time buyers will see Government topping up by £50 every £200 saved for a deposit

PERSONAL TAXATION

• The tax-free personal allowance to rise from £10,600 in 2015-6 to £10,800 in 2016-7 and £11,000 in 2017-8

• The threshold at which people start paying 40p income tax to rise by above inflation from £42,385 in 2014-5 to £43,300 in 2017-8

• Annual paper tax returns to be abolished, replaced by digital accounts.

• Transferable tax allowance for married couples to rise to £1,100

• Class Two national insurance contributions for self-employed to be abolished in next Parliament

• Review of inheritance tax avoidance through “deeds of variation”

Funding is pledged for city housing project

THE York Central site was named in the Budget as one of the Government’s ten Housing Zones, spelling a funding boost for the city.

York was one of 29 sites shortlisted in January to become a Housing Zone, and after being named as one of the ten selected yesterday it will now receive funding towards the proposed multi-million pound York Central redevelopment.

York MP Julian Sturdy said: “ The funding announced by the Chancellor will prioritise brownfield house building, protecting York’s precious countryside.

“The project will also create more than 13,000 new jobs.”

The ten Housing Zones will win a share of £200 million for infrastructure and land remediation to get projects off the ground.

The successful zones also have access to cheaper borrowing from the Public Works Loan Board and access to expert planning and technical support.

Devolution – new powers are just not enough

THE Chancellor’s Budget speech included a new deal for the West Yorkshire Combined Authority.

But York politicians have reacted with disappointment, saying that unlike the deals for Manchester or Cambridge, the new agreement for the West Yorkshire body – of which York is a member – does not include new financial powers.

York’s Labour council leader, Cllr Dafydd Williams, has criticised what he has called a meaningless offer, which does not let the WYCA keep the growth in business rates.

The Government’s public documents on the agreement are remarkably thin on detail he said.

He added: “What’s clear is that we are getting a bad deal compared with Manchester.”

“Reading between the lines, we will get a bit more say but the final say stays with the Government.

“That’s not devolution. It does not match the scale of our ambition.”

Cllr Williams said: “Fiscal devolution is the only devolution - if you don’t have the money then the power isn’t there.”

His scepticism is matched by Roger Marsh, the chairman of Leeds City Region Enterprise Partnership, who has said that while the new agreement is an improvement, he would have liked to see more powers for the region.

But York council’s opposition leader, Conservative Chris Steward, said the new deal – which includes powers over skills, transport, business support and housing – should be welcomed. He said: “It shouldn’t be about comparisons. We want the best for our region. Manchester is making it work and we need to learn from that.”

Cuts hit needy, Labour claiming

DEEPER cuts announced in the Budget yesterday will impact on hard-hit public services in York, a Labour prospective candidate for the city has warned.

Rachael Maskell, running to be the MP in York Central, said people most in need would bear the burden of a “staggering” £30bn in cuts to public services and welfare by 2017/18.

She added: “Today, the Chancellor talked about the sun beginning to shine, which I am sure is true for those who will receive his millionaire’s tax cut in the south-east, but is a long way off for families in York.”

Meanwhile, Ryedale’s Conservative MP Anne McIntosh has welcomed tax changes for farmers.

Miss McIntosh said: “Farmers who are self-employed in Thirsk, Malton and Filey will welcome the ability to average their profits for income tax purposes over five years to protect them from the increasing volatility they face.

“The racing industry represented locally by trainers, jockeys, stable lads and lasses will welcome the betting right announced by the Chancellor today.”