Budget 2012: summary of key points - Economy - News - Moneyfacts

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Budget 2012: summary of key points

Budget 2012: summary of key points

Category: Economy

Updated: 01/05/2014
First Published: 22/03/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Does the word "budget" have a sleep-inducing effect on you?

Don't worry; we've picked out the important nuggets from the 2012 Budget so you can see at a glance what the changes are.

This isn't the full budget by any means, you can get a more in-depth summary by reading our news article "George Osborne delivers 2012 budget".

Budget 2012: the bite-size version
Income Tax
  • Personal tax allowance (the amount you earn before you pay any income tax) to rise to £9,205 from April 2013.
  • Additional Rate Tax – rate to be reduced from 50% to 45% for those earning over £150K per year, with effect from April 2013.
  • Every taxpayer to receive a personalised tax statement, telling you how much you've paid, and how it has been used.
Stamp Duty
  • New Stamp Duty tier of 7% of the purchase price for properties worth £2 million or more.
  • Any residential property bought by a company will pay 15% Duty, and offshore companies owning property worth £2m or more will have to pay Capital Gains Tax when coming to sell the property too.
Child Benefit
  • If a parent or guardian has an annual income of £50,000 or over, Child Benefit will decrease by 1% for every £100 earned over the threshold. This would be assessed on individual income – so if two parents earned £45,000 each, they would still get the Child Benefit in full. But if one parent earns £55,000 and the other £15,000, that family would lose a portion of their Child Benefit.
  • If a parent or guardian has an annual income of £60,000 or over, Child Benefit will no longer be payable at all.
Pensions
  • State Pension Age will automatically be reviewed in line with life expectancies. According to MGM Advantage this could mean that if life expectancies improved at the same rate as they have over the last 20 years, in 2031 the State Pension age could rise to 69 by 2031, and to 73 by 2051.
  • A new, single tier state pension will be announced later this spring for future pensioners. It will be based on contributions and is estimated to currently be worth £140 per week in an effort to simplify the basic and second state pension.
  • Age related tax allowances will be replaced with a single personal allowance for all those reaching the age of 65 by 6 April 2013 (people over the age of 65 get an extra high personal income tax allowance). The current age-related allowances for existing pensioners will be frozen until the new, single personal allowance reaches it.
Cigarettes and alcohol
  • Duty on cigarettes, tobacco and cigars will rise 5% above inflation – this is the equivalent of 37p on a pack of cigarettes.
  • No rise to alcohol duty

What next?
George Osborne delivers 2012 budget

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