General Procurement

Key highlights of March 2014 Budget announcements

UK Chancellor George Osborne delivered his annual Budget speech in Parliament today.

The key points were:

  • OBR growth forecast revised upwards, to 2.7% in 2014, 2.3% in 2015 and 2.6% the following two years, with 2.5% predicted in 2018. The forecast for underlying cash borrowing has been revised downwards, with a small surplus expected in 2018-19.
  • Confirmation that a new £1 coin will be introduced in 2017.
  • Charter for Budget Responsibility to be brought forward in Autumn.
  • Structural welfare cap to be set at £119bn in 2015-16 rising with inflation. A vote will take place next week.
  • HMRC budget for addressing tax non-compliance to be increased with more powers to collect from bank accounts.
  • VAT on fuel for air ambulances to be removed.
  • Inheritance tax for those in emergency services “who give their lives protecting us” to be waived.
  • 15% stamp duty on purchase of residential property by companies to be expanded to cover those valued over £500,000.
  • All long haul flight to carry Band B tax rate for Air Passenger Duty from 2015 and new start-up support for routes from regional airports.
  • Lending for exporters to double to £3bn with interest rates for exporters to be cut by a third.
  • Help to Buy scheme in England to be extended to 2020.
  • Forecast for North Sea oil receipts revised downwards with new allowances to support North Sea investment.
  • Extension of grants for small businesses to support apprenticeships, the annual investment allowance for companies doubled to £500,000 and extended to end of 2015, and business rates discounts and enhanced capital allowances to be extended in enterprise zones for three years.
  • A £7bn package to reduce energy bills for manufacturers including a capping of the Carbon Price support rate from 2016-17, an extension of the compensation scheme for energy intensive industries to 2019-20, and new compensation to protect against the increase costs of the Renewables Obligation and Feed-In Tariffs.
  • The fuel duty rise planned for September will no longer take place.
  • Bingo duty cut to 10% and duty to be raised on fixed odds betting terminals.
  • Alcohol duty escalator to be scrapped, a freeze in duty on whisky and cider and a further cut to beer duty of 1p.
  • Tobacco duty to increase by 2% above inflation.
  • Income tax personal allowance to increase to £10,500 from April 2015.
  • Confirmation of an increase in the maximum tax-free childcare support available to £2,000 per year per child.
  • £140m of funding to repair flood defences.
  • Reform of ISAs into a simpler product with an increase in annual limits to £15,000.
  • Cap on investments in Premium Bonds to be lifted to £40,000.
  • Changes to pensions including a new requirement for guidance on pension choices for those retiring with a defined contribution pension pot, a reduction in the guaranteed income required to access savings flexibility, and an increase in the total savings that can be taken as a lump sum. A new pensioner bond is also to be launched in January 2015 and legislation to remove remaining tax restrictions on pensioner access to pension pots is planned.
  • Abolition of 10% rate on savings income and an increase in the amount of savings to benefit to £5,000 from April 2015.

Categories: General Procurement

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