George Osborne's 2014 Budget has delivered tax savings for low- and middle-income earners, a raft of new measures to help savers and pensioners, and a commitment to support British exporters and manufacturers.
Osborne's Budget 2014 speech started on a high note with news that the Office of Budget Responsibility (OBR) has revised the GDP forecast upwards for this year to 2.7% and a prediction that the UK would achieve a small budget surplus by 2018-19.
"This is a Budget for building a resilient economy," said Osborne. " If you're a maker, a doer or a saver: this Budget is for you." However, he added: "We are putting Britain right but the job is far from done. This country still borrows too much, we still don't invest enough, export enough or save enough."
For businesses, there is to be new support for exporters and manufacturers and tax breaks for firms that invest. Lending for exporters is to be doubled to £3bn and interest rates on that lending to be cut by a third. A £7bn package of measures to cut energy bills promises to help manufacturers.
In addition, the annual investment allowance (AIA) will be doubled to £500,000 until the end of 2015. This means 99.8% of firms will get a 100% investment allowance.
Businesses hoping for news of a radical reform of business rates will be disappointed. However, the chancellor did extend business rate discounts in enterprise zones for another three years.
The most radical announcements concerned pensions – with a pledge by Osborne that in future, pensioners will not be forced to buy annuities. Tax restrictions on pensioners' access to their pension pots are to be removed and the taxable part of pension pot taken as cash on retirement will be charged at 20%, down from 55%.
The headline measures for businesses announced by the chancellor include:
- Lending for exporters will be doubled to £3bn and interest rates on that lending will be cut by a third.
- The number of apprentices will be doubled and new degree-level apprenticeships are to be created.
- Business rate discounts and enhanced capital allowances in enterprise zones are to be extended for three years.
- The rate for the R&D tax credit for loss-making SMEs is to increase from 11% to 14.5%.
- The SEED Enterprise Investment scheme is to become permanent.
- The investment allowance will be doubled to £500,000 and be extended to the end of 2015. This means 99.8% of firms will get a 100% investment allowance.
- A £7bn package will cut energy bills for British manufacturers as well as consumers.
Image: Altogetherfool on Flickr.