George Osborne delivered a “welcome boost” for small business in his budget with a range of tax cuts but admitted to missing targets for United Kingdom growth.
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Forecasts for growth in the British economy over the next four years were downgraded Wednesday, announced by Britain’s Chancellor George Osborne in budget.
The deteriorating growth prospects and lower-than-forecast tax revenue have limited his options, but he was able to announce an increase in the starting point for the higher 40-per-cent rate of income tax to £45,000 a year in 2017-18, compared with the current level of £42,385.
The Chancellor described the changes as “the biggest tax cut for business in this Budget”.
The soft drinks industry may face a hit when sugar tax is introduced in two years time through two separate bands.
Responding to today’s budget McGinn said: “The Chancellor talks a good game but in reality, this was a budget of failure”.
Corporation tax, now at 20 percent, will be cut to 17 percent by 2020, and the main rate of corporation tax will be reduced to from 28 percent to 20 percent.
However Terry Scuoler, chief executive of manufacturers’ organisation the EEF, said: “If there was ever a time when industry wanted to be left alone in a Budget then this is it”.
And there was little or no benefit from yesterday’s tax and benefits announcements to the lowest 50% of earners – who will already be up to £1,500 a year worse off after tax and benefit changes introduced since May’s general election.
But he insisted he was on track to meet the surplus target: “I’ve made adjustments to my plans to make sure debt does fall as a proportion of national income in the coming year; I’ve made adjustments to my plans to make sure we are going to live within our means and get that surplus”.
Another £3.5bn comes from cuts in government departments, this being the “50p in every £100 the government spends” Mr Osborne unveiled on Sunday.
“If you hold to the course, if you deliver those plans, if the economy grows as expected, then we will have a surplus towards the end of the Parliament”, Osborne told BBC Television in Leeds, northern England, on Thursday.
“On these forecasts the Chancellor has now effectively lost the scope to raise public service spending in 2020-21”. The economist explained the tax will not have any impact on the other 80% of sugar consumption, and may increase it as people move away from soft drinks to other sugary products.
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Following last year’s Budget and Autumn Statement, today’s announcement has been seen as a reprieve for the buy-to-let market, with the Chancellor electing to focus on other areas in his task to cut £4bn of government spending.
