March 19, 2014
Budget 2014: Predictions
It’s the day of the UK 2014 Budget and the big question is – will the Government favour the electorate or SMEs?
There’s just 14 months left until the next election which could influence Chancellor George Osborne’s financial decisions. But the Coalition’s reliance on small businesses to drive the country out of recession may be an even stronger influence.
Whatever the outcome, Moorepay is here to support you and your business with help and advice about any changes that take place…
What is the UK Budget?
The Budget decides how the Government will spend Britain’s public money – to be spent on public services such as schools, hospitals, housing, benefits and police.
The Government annually calculates where the money is spent, where cuts need to be made and how much tax should be put on goods.
The red briefcase you see on TV is a tradition that goes back to 1860 after it was used by William Gladstone. It usually contains the Chancellor’s speech. In 1997, Chancellor Gordon Brown had a new one made.
Where does public money come from?
The three ways the Government gets its money are…
- VAT (Value Added Tax) –the tax on goods, which affects almost everything from petrol to DVDs. It’s currently set at 20%.
- Income tax – the tax which comes out of employees’ wages – with richer people currently paying 50 per cent to the state.
- Duties – this is added to items like cigarettes and alcohol.
What is expected from the 2014 UK Budget?
Osborne is expected to say that the Government will give businesses what they need to boost Britain’s economic recovery. He may also announce a rise in personal tax allowance to £10,000 from the April 6 (the new tax year).
The higher income tax threshold is should rise from £41,450 to £41,865 but analysts say that a rise for middle earners is doubtful. National insurance could also rise beyond the current £7,750 a year.
Also, poorer people in pension schemes could be allowed withdraw their money rather than just getting paid regularly and house prices are likely to be looked at.