Advertisement

Budget 2015: What To Expect And What Not To

The Chancellor has said there will be "no giveaways, no gimmicks" so what can we expect to see in today's Budget?

:: Income Tax: Personal allowance increase to £11,000. George Osborne has already announced the amount people can earn before tax kicks in will be increased to £10,600 in April but it is expected he will go further.

:: Pensions: The Chancellor has indicated he will announce that pensioners will be able to swap their fixed annual incomes – annuity – for cash.

This is an extension of measures contained in the Autumn Statement, which saw savers given the option of drawing down cash from their pensions, rather than being forced to buy an annuity. This comes into effect in April.

:: Google Tax: Expect further tax avoidance measures to build on the so-called "Google Tax" announcement last year.

The Government wants to stop multinational companies from moving profits around the world to keep the tax bill down.

:: Something for the regions: Expect announcements of investment in infrastructure, science, energy and housing. Remember, Mr Osborne wants to create a "northern powerhouse".

:: Beer: The Chancellor is expected to either freeze beer duty or announce a 1p or 2p cut on a pint.

:: Fags: Tipped for a 28p cut on a packet of 20 but the Chancellor is also thought likely to announce a tobacco levy.

He already ordered a consultation on the issue on the grounds that smoking has a significant cost to society and tobacco firms should pay for it.

If he did it could indicate he could look to impose a levy on other industries using the same rationale.

:: National Insurance: There have been some suggestions the Government could increase the amount of earning before National Insurance Contributions (NICs) are paid.

It would help the lowest paid and, therefore, would win favour with the Lib Dems but is an income tax/NICs double-whammy too much?

What we are unlikely to see:

:: Inheritance Tax Cuts: The Tories included this in their 2010 manifesto, agreed in coalition not to make it a priority but still want to make changes.

It has been disclosed the Treasury drew up plans to allow parents to pass homes worth up to £1m to children tax free ahead of the Autumn Statement but the Lib Dems blocked it.

David Cameron has said the proposals will not be included in the Budget – but do expect to see them in the Tory manifesto.

:: 40p Tax Rate Changes: The PM has made clear he wants to raise the level at which people start paying the 40p tax rate.

At the Autumn Conference he pledged to increase the threshold from £41,900 to £50,000 by the end of the next parliament.

There had been suggestions measures could appear in the Budget but given the Lib Dem opposition to tax cuts for the wealthy it is unlikely.

:: And the white rabbit?

Well this might not be quite like all other pre-election Budget giveaways, despite the fact the Chancellor has around £5bn to play with.

Remember, if the Tories look good the Lib Dems will look good and as the coalition partners are going toe-to-toe in a number of marginal seats then Mr Osborne will be keen to make sure Nick Clegg's party are not the ones left showing the rabbit.