Cameron's tax set-up 'private'

David Cameron David Cameron has come under pressure to reveal whether he will benefit from the cut in the 50p tax rate on earnings over £150,000 announced by Chancellor George Osborne in the Budget.

Labour MPs demanded a list of Cabinet members who will benefit from what they have branded "a budget for millionaires", after Mr Osborne revealed that he does not personally pay the 50p rate, despite having a salary of £134,565, rental income from a property in London and a shareholding in his family's wallpaper firm.
Downing Street insisted that tax arrangements were "a private matter between ministers and HM Revenue and Customs".

Mr Cameron's spokesman declined to say whether the PM - who declares rental income from a London property on top of his £142,500 salary - paid the top rate, which is due to fall to 45p in April 2013.

And Mr Cameron responded brusquely when challenged on the issue during a visit to Cumbria.
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"My own salary is published, it's on the record," said the PM. "I cut it by 5%, I've frozen it for the whole of the Parliament and I'm quite content to do that, but all my interests are declared and all of them are known about, thank you."

The row came as a respected economic thinktank said that an additional 1.3 million people on "relatively modest incomes" could be drawn into the 40p income tax band as a result of changes announced by Mr Osborne, bringing the total number of higher-rate payers to five million for the first time.

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Cameron's tax set-up 'private'

As of April 2013, the 50p rate will be reduced to 45p following a study which Osborne claims revealed it would make little or no difference to the amount of tax raised but would significantly reduce the damage to the economy. 

The much-debated cut to child benefit was confirmed, albeit through a less direct hit than was outlined in the pre-Budget report. The benefit will be removed gradually for those earning more than £50,000 – reducing by 1% for every £100 earned over the threshold, cutting off completely at the £60,00 mark. The Chancellor had planned to axe it where one parent earned over £43,000.

Financial service providers always refer to 'typical APR' in advertising to attract customers with favourable rates of interest.

Yet the typical APR on loans and credit cards is only available for those applicants who have a squeaky clean credit record, everyone else could end up with a much higher rate. For example, under EU rules, credit card providers only have to provide the typical APR advertised to 51% of applicants.

So always consider this when applying for accounts and products, and if approved – look out the actual APR that you will be charged.

A potential winner - Osborne particularly name-checked the South East in his Budget which many assume is a veiled reference to a Heathrow expansion.

The cost of a room in a care home in many parts of the country is now over £30,000 a year, according to figures from Prestige Nursing and Care. So even if the prime minister announces a cap on care costs - last year the economist Andrew Dilnot called for a new system of funding which would mean that no one would pay more than £35,000 for lifetime care - families will still face huge accommodation costs. Ways to cut this cost include opting for home care rather than a care home. Jonathan Bruce, managing director of Prestige Nursing and Care, said: "For older people who may need care in the shorter term, home care is an option which allows people to maintain their independence for longer while living in their own home and should be included in the cap." However, the only other answer is to save more while you can.

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A new stamp duty rate of 7% (up from 5%) will be introduced on properties worth over £2 million - widely considered a sop to the Lib Dems calling for a mansion tax. 

As was widely predicted, Osborne froze the fuel duty hike due in September 2013. He announced that his repeated scrapping of this duty has saved the average Ford Focus owner £7 on every tank of petrol.

Alcohol is on safe ground - for the moment. Duty will remain the same but do expect an announcement on alcohol pricing.

Duty will rise on all tobacco products by 5% above inflation, which will add 37p to a packet of cigarettes.

The Chancellor naming Wallace and Gromit caused quite a commotion on the Tory backbench and was possibly the most lively moment in the Chancellor's speech. The Chancellor is intent on keeping UK TV and film productions in Britain and will ramp up support to stop the exodus of British production companies abroad.

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The Institute for Fiscal Studies also questioned Mr Osborne's claim that the package will raise five times as much extra revenue from the wealthy than they gain from the top-rate cut.

The "hotch-potch" Budget rested on the "uncertain" assumption that rich individuals who avoided paying tax at 50p will be willing to stump up at the 45p rate, said IFS director Paul Johnson.

Meanwhile, there were indications that Mr Osborne's assault on VAT loopholes was having an impact on business, with the UK's biggest bakery chain Greggs seeing £20 million sliced from its value by a 5% slump in its share price following the announcement that the 20% levy will be imposed on all hot food sales.

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