According to the Chancellor of the Exchequer, the UK enjoyed the fastest growth in the G7 in 2014. Looking forward, Mr. Osborne has forecast that debt will fall as a share of GDP from 2015-2016, a year earlier than originally forecast in his Autumn Statement.
Taxes, duties and levies
Perhaps the biggest sea change in the Budget was the announcement that the annual tax return is to be abolished. Millions of individuals will have the information HMRC needs automatically uploaded into new digital tax accounts. Businesses will feel like they are paying a simple, single business tax – and again, for most, the information needed will be automatically received.
Tax-free personal allowance will increase from its current rate of £10,600 (€14,650) to £10,800 (€14,930) in 2016-17 and £11,000 (€15,210) the year after.
The increases to the personal allowance from £6,475 (€8,950) in 2010, to £11,000 (€15,210) in 2017-18 will save a typical taxpayer £905 (€1,250).
The 2015 Budget also confirmed that fuel duty will be frozen again; since 2011, the government has cut and frozen fuel duty, saving a typical motorist a total of £675 (€930) by the end of 2015-16.
Duty on alcoholic beverages are also being frozen – there will be a 1% duty cut off a pint, a 2% cut for spirits and most ciders, and a freeze on duty on wine.
The government is also increasing the rate of the bank levy (one of the taxes that banks pay) from 1 April 2015. This will raise an additional £900 million (€1.2 billion) a year.
Oil & Gas sector support
To encourage further investment in the North Sea, the government will introduce a new Investment Allowance and reduce the supplementary tax charge on oil and gas companies further, from 30% to 20%, from 1 January 2015.
The rate of Petroleum Revenue Tax paid on older oil and gas fields will also be reduced from 50% to 35%.
These changes are expected to increase oil production by around 15% by 2019, and drive £4 billion (€5.5 billion) of new investment over the next five years.