Some big shocks are expected in the budget set to be announced by George Osborne in the House of Commons tomorrow.
With £4bn of savings needing to be made by the end of the current Parliament in 2020, Osborne is expected to announce details that are not likely to please the population.
The budget is the Government’s announcement on how it will spend the country’s money for the next twelve months.
It is worked out by the Chancellor of the Exchequer with help from his office, the Treasury, with conclusions then announced to the public on how they plan to spend and save money.
Key points of the budget – what could be in the speech
- Tax free earnings to rise from £10.6k to £11k
- 2p per litre tax increase on petrol
- People putting more into pensions are still expected to earn a higher tax relief, meaning not as much tax needs to be paid, than those who don’t pay in as much
For Nottinghamshire specifically, the rise in income before tax is required to be paid could be welcomed because the county’s earnings are below the national average.
This is in addition to the introduction of the national living wage at the start of April – which has itself caused widespread controversy about how it will affect the sustainability of businesses.
However, the other two key points are not so positive for Nottinghamshire.
The rise in fuel tax is the first rise in the past five years with global oil prices being high, but as the price of the barrels of fuel themselves decrease and continue to do so, the tax on them is likely to be announced to increase by 2p per litre.
This is an issue that will affect all national motorists and is unlikely to be well received as petrol and diesel is currently taxed by 57.95 pence per litre with this expected to rise to 59.95.
With Nottinghamshire having an income lower than the national average, the plan to alter or completely end tax relief on pension contributions being scrapped will not serve as a positive note to some people.
Video: We asked the Nottingham public what they want to see included in the budget
Tax relief is what tax is not needed to be paid on a part of someone’s income.
However, there is a divide within the amount of tax relief that an individual gets based on the amount that they pay into their pension.
The more a person pays into their pension, the more tax relief they get upon that contribution.
We are looking at the reverse of the Autumn statement
This comes after the autumn statement where George Osborne was “positive about the economy,” according to Nottingham Business School lecturer in public policy Pete Murphy.
He said he was positive because: “There was a short term upturn in the domestic economy and a long term decline of the oil prices which led to an unexpected windfall in domestic taxes.
“Now however we are looking at the whole thing in reverse.”
