Budget 2015: what does it mean for you?

We take a look at how the Chancellor's Budget speech will affect you

Updated: 
Finances

George Osborne said there would be no giveaways, he said there would be no gimmicks, but we all knew that the final Budget of the parliament would involve a few rabbits leaping out of the hat. Yet some of those rabbits surprised even the most experienced economic analysts.

It'll take a day or so for the full Budget to be broken down and assessed, but in the meantime we've been taking a look at how will Osborne's final speech of this Parliament affect you.

Tax allowances raised

It's become a bit of a theme in this Parliament, and today Osborne raised tax-free personal allowances once more. The tax-free personal allowance will rise to £10,800 in 2016-17 and to £11,000 the year after that.

According to the Treasury this will save a typical taxpayer £905. And higher rate taxpayers won't miss out, as the government intends to increase the threshold at which earners begin paying 40%
tax to £43,000 in 2017-18.

Tax returns scrapped

Speaking of taxes, Osborne also revealed plans to abolish the annual tax return within the next five years. Instead, HMRC will automatically create digital tax accounts that can be checked online at any time, allowing individuals and small businesses to submit accounts throughout the year using their computer, tablet or even smartphone.

For now, people who prefer filing a yearly paper return will be able to do so, but the first 10 million individuals who want to spread their tax payments throughout the year will be able to begin in 2016.

Savings taken out of tax

From April next year there will be a new Personal Savings Allowance that the chancellor says will take 95% of people out of paying tax on their savings altogether.

Basic rate taxpayers will be able to earn up to £1,000 in interest before they start paying tax, while higher rate taxpayers can earn £500 in interest before they have to pay the taxman a share of their returns.

While this may mean some people no longer bother using a tax-free ISA account, the chancellor announced changes to ISAs too. From April, savers will be able to take money out of their ISAs and pay it back within the same year without losing the tax break on their cash.

First-time buyers helped

Perhaps one of the most unexpected moves of the Budget, and one that could certainly be labelled a giveaway, was the new Help-to-Buy ISA which has already been dubbed the 'Help-to-Buy-Isa'.

For every £200 that would-be homeowners save towards their first property, the government will pay an extra £50 up to a maximum bonus of £3,000. Some experts have questioned what this extra support might do to house prices and whether this is just a way to increase the value of older voters' homes.

Booze, cigs and gambling won't cost more

It's very common for Chancellors to increase duty on things that are bad for us, so-called 'sin taxes' but this year Osborne declared there will be no changes on gaming or tobacco.

But there was even better news for people who like a drink, as beer duty will be cut by a penny a pint, cider duty will fall 2% and duty on whisky and spirits will also fall 2%. Wine duty will be frozen, so no price hikes there.

Fuel duty scrapped

Announcing plans to scrap the fuel duty increase planned for later this year, Osborne alliteratively declared: "£10 off a tank with the Tories"

However, analysts have been quick to point out that deciding not to add £10 to the cost of a tank is not the same as cutting the price by a tenner.

Pensioners freed

Osborne had already changed pension rules in last year's Budget, meaning that from next month people aged 55 and above can access their pension savings as they see fit, rather than being tied into an annuity.

His latest announcement means that from April 2016, the five million pensioners who already have an annuity will be free to sell it for a lump sum, without paying a punishing 55% tax on the bargain.

However, wealthy pensioners may not be so thrilled as the chancellor has reduced the lifetime pensions allowance from £1.25 million to £1 million. Above that, they'll pay between 25% and 55%, depending on how they access the money.

Banks targeted

From the first of April this year, the government will increase the rate of the bank levy, which is one of the taxes banks pay. According to the chancellor, this will raise an additional £900 million a year.

PhD students supported

Graduates who want to pursue a PhD or masters but who can't find funding or support will be able to access loans of up to £25,000.

Historical humour indulged in

In his 2014 Budget statement the chancellor paid £1 million to support celebrations of the 800th anniversary of Magna Carta, with many people suggesting he only did so in order to crack a joke at Ed Miliband's expense. "King John's humbling, centuries ago seems unimaginably distant.

A weak leader (pause) who had risen to the top (pause) after betraying his brother (pause) compelled by a gang of unruly barons to sign on the dotted line," he said then, to shouts of hilarity and finger pointing at the Labour benches.

This year, he did a similar thing, with a fairly lengthy joke about involving the Battle of Agincourt, Scottish nationalists and Miliband. Once again, this required a £1 million investment. So two jokes, total cost to the country of £2 million. Still, at least it lightened the mood.

What do you think? Is today's Budget good or bad for the people of Britain? Have your say using the comments below.

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