Budget 2015: key points
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HEADLINE ANNOUNCEMENTS:
National Living Wage: £7.20 an hour in 2016, rising to £9 an hour by 2020
40p tax threshold rising to £43,000 from next year
Personal tax allowance raised to £11,000
Working parents of 3+4 yr olds receive 30 hours free childcare a week
Working age benefits to be frozen for four years
Corporation tax to fall to 19% in 2019, 18% in 2020
Bank levy to be reduced over next six years. New 8% profits surcharge introduced
Permanent non-dom status to be abolished
Fuel duty remains frozen for the year
LATEST NEWS:
Time to kill? Read the chancellor's Budget speech in full here
Living Wage introduced: compulsory at age 25, starting at £7.20 an hour in 2016 and rising to £9 an hour by 2020. "Britain deserves a pay rise and Britain is getting a pay rise," says Osborne. Headline announcement, that
"From September 2017, all working parents of three- and four-year-olds will receive free childcare of up to 30 hours a week," announces Osborne.
Key word on 30 hours free childcare there is "up to". Like those Sports Direct sales that say everything is "up to" 90% off... #budget2015
— Simon Neville (@SimonNeville) July 8, 2015
According to the ONS, 51.5% of households received more in benefits than they paid in taxes in 2013/14
As part of his £12bn welfare cuts, Osborne says 18-21-yearr-olds must "earn or learn". Housing benefit for that group is abolished as expected
Mortgage interest relief on residential property to be restricted to the basic rate of income tax. To be phased in over four years from April 2017
Osborne says lower corporation tax helps created jobs. Announces tax will fall to 19% in 2019 then 18% by 2020
Annual investment allowance hiked to £200,000 a year. This will help small and medium-sized firms
As was widely expected, you can pass £1 million on to children without paying inheritance tax
Another boost for motorists: no MOT will be needed on a car until it is four years old (up from three)
Stat attack from the ONS: poorest 20% of households pay average of £281 a year in fuel duty. Richest 20% pay £674
Fuel duty remains frozen for the year
In order to avoid being seen as too 'pro banks', the chancellor will introduce an 8% surcharge on bank profits from next year
In a move that's been seen as a direct please to get HSBC to stay in the UK, Osborne says the bank levy will be reduced over next six years
Permament non-dom status to be abolished
Osborne tax aim at tax dodgers. Has pledged £750 million to help HMRC identify tax avoidance. Move expected to raise £7.2bn
The NHS will receive further £8bn a year in real terms by 2020
The richest 20% paid six times as much tax as the poorest, says ONS. See graph below for more details
Britain's deficit was 10.2% in 2010. This is forecast to fall to 3.7% this year, and 2.2% the next. Surplus will only arrive in 2019/20UK economy grew by 3.0% in 2014, revised up from 2.8%
"Our long-term economic plan is working," says the chancellor
The chancellor has stepped up and the first Conservative Budget since 1996 is underway
Good news: tax revenues are £15 billion higher than projected at the March budget Bad news: that won't stop the chancellor pressing ahead with planned cuts
In a bid to justify swingeing £12bn cuts, George Osborne will point to the plight of Greece and warn greatest mistake would be to "think all our problems are solved"
The chancellor expected to begin speech at 12:30
First Conservative Budget since 1996
BACKGROUND
Here are some of the headline announcements that were leaked in the build up to today's Budget speech
Cuts to tax credits
It's widely accepted that the chancellor will announce cuts in tax credits in his post-election Budget on Wednesday, which is causing real panic among some child poverty campaigners.
Analysis from the Social Mobility and Child Poverty Commission suggests that cutting tax credits would mean cutting the incomes of 45% of working families, as well as affecting around 2.6 million families without a working adult.
The Institute for Fiscal Studies reported in May that reducing tax credits back to the levels of 2003/04 would mean a further 300,000 children are pushed into poverty.
No IHT on homes worth less than £1m
The chancellor will use his first Budget after the election to announce that the government will raise the inheritance tax threshold to £1million from 2017.
Salary sacrifice culled
There's been speculation that salary sacrifice may be axed. This is used by many people to cut the cost of childcare and as a way of paying money directly into their pensions. It can even be used to buy a subsidised bike under the Cycle to Work Scheme.
Benefit cap to be cut further
In the Tory manifesto, they pledged to reduce the benefits cap to £23,000 from its previous level of £26,000. But over the weekend, Osborne revealed he actually plans a far harsher cut. It's now believed the chancellor will reveal that families living outside of Greater London will have their benefits capped at £20,000 a year, although the final cap has not been officially revealed.
This move could affect around 89,000 families.
Subsidised housing to be cut
Local authority and housing association tenants usually enjoy a subsidised rent, but this is almost certainly about to change. Osborne revealed at the weekend that the 340,000 English higher earners living in social housing would be forced to pay market rent from 2017/18.
It is expected that the chancellor will state that local authority and housing association tenants earning £40,000 or more in London or £30,000 in the rest of England will be affected.
Cuts to disability benefits
The BBC has seen leaked plans written before the election, suggesting that some sickness benefit claimants may be moved to receiving Jobseeker's Allowance rather than their current health-based benefits.
That would cut their income by around £30 a week, but it is not yet known if this will go ahead.
BBC funding slashed
Finally, the BBC will likely be told to fund the cost of free TV licences for the over 75s itself, a move which could cost the BBC as much as £650million.
In order to help fill that massive hole in its funding, the government could allow the BBC to charge the public a fee for accessing its online service iPlayer.
More background reading on AOL Money:
Where will the chancellor cut spending?
Osborne to relax Sunday trading
Budget: don't expect more money in your pocket