Hope it helps.
General Budget info
- What better time to have a budget than just a few months before a general election. Looking forward to seeing what the Chancellor has in store for us today and think this really will be him firing the starting gun in the election battle.
- You can guarantee that any favourable budget measures are likely to be targeted at key 'swing voters' (those who have yet to make up their mind on who they will vote for at the next election) and getting them onside.
- It would be a little surprising if the Chancellor did not dangle a carrot or two before the electorate, either in the form of tax cuts or increased spending on key public services such as health and education.
- Look out for a formal announcement that, for the immediate future, ISA's are here to stay as well... at last, having spent so many years ignoring savers, it looks like this could be a big leap forward from the Chancellor.
- Following next general election it is likely that there will be a period where Gordon Brown will once again look to stabilise and consolidate public and private spending, and this is most likely to be in the form of increased taxes.
- With the election out of the way by May 05, we would be very surprised if a tax increase was not announced in budget 2006.
- UK economy has had robust growth over the past year or so, especially when you look at how our European relatives have faired, with their growth generally remaining disappointing.
- The government's Income Tax receipts have grown at a healthy pace over recent months, and this, combined with the fact that the Chancellor will not want to do anything too radical on the run up to the election means we don't expect to see an income tax increase.
-The Chancellor will want to be seen to be doing something for families so look out for extra childcare tax credits, and maybe a few other new initiatives in the pipeline?
- He will also want to appeal to more pensioners so he could raise the winter fuel payment or increase the personal tax allowance for the elderly by more than inflation, so they can keep more of their money.
Stamp Duty
NOTES: Currently, the tax is payable at 1% on all property purchases worth more than £60,000, with the rate rising to 3% at £250,000 and 4% on deals of more than £500,000.
- We have been one of many groups lobbying hard for the Chancellor to review stamp duty in this Budget and we think he may well raise the current stamp duty threshold of £60,000.
-It may not be moved to reflect the increase in house price inflation, but an increase is definitely a real possibility.
-This will be a great relief to First time Buyers (FtB) as recent gov't stats show that currently 70% of them pay stamp duty, yet only 10 years ago, only 20% of FtB's had to pay - I think you will agree, this is a shocking statistic!
Council Tax
- On average across the UK council taxes has risen by a whopping 70% since 97 and this is now a real political hot potato in the run up to the election with all the rival parties jostling for position. We think the Chancellor may well try and pull a rabbit out of the hat on this one by capping the level of any future increase.
Sin taxes
- With regards to the so called sin taxes, this is where people should see the real benefit of having the budget so close to the election, we anticipate that there will be no increase in tax on fuel, so no need to rush to the petrol pumps tonight.... that being said, there are rumours that this budget could pave the way for a new 'environmental tax' system for cars?
- For cigarettes and alcohol, well that's another story, a few p on packets of cigarettes and your favourite pint is pretty much a safe bet (probably not on his favoured spirits though!).
Inheritance Tax
- This is another area where the Chancellor is under great pressure to lift the threshold from its current £263,000 limit.
- Residents of any area are badly effected by this so called "stealth tax" especially as house prices have increased to the extent that more and more people's estates go well over the £263k limit.
- Whilst we have our fingers crossed that the Chancellor will review it, we think it may be brushed under the carpet to make way for a more grandiose review of Stamp Duty.
Hope this helps and happy media hunting.. if anyone gets stuck and need a hand with media stuff, don't forget, I am only a phone call away.
