“George Osbourne presented his budget today delivering and interesting balancing act with clear winners and losers.
We have be led to expect large public sector spending cuts to be implemented over the coming 2 years. The good news is that those cuts will now be implemented over 4 years, taking some of the sting out of the cuts. However this still mean for tax credits alone a reduction in family income across the country by £4.5 Billion a year, that is a lot about 10% of our defence budget to put it into perspective. On the other side of the income coin, minimum wages are being replaced by living wages at £7.20 an hour, thereby helping the poorest and youngest in our society. The living wage will effect local Councils and Supermarkets.
Looking at business the Living wage increase is balanced by a cut in Corporation tax from 20% to 19% then 18% next year. Corporation tax is often seen as a tax on productivity, and that is helpful to those organisation making profits.
We have to reduce the £1.5 trillion of national debt we have inherited. The interest on that debt is currently, at all time low interest rates, some £50 Billion a year. That is 7.5% of the entire public spending budget. The alternative is to leave that debt to our Children. Overall the path to austerity feels less severe than we had feared, but the cuts are coming all the same.
A Detailed Review from local Accountants and Tax Advisors Novitt Harris may be found HERE
Also see Penny Barr of Barr and Associates