Friday 25 March 2011

Who will benefit from Budget 2011

Who can expect to be better off as a result of George Osborne's measures?

First-time buyers
 
First time buyers are to receive aid from the Government to the tune of £250m. Under a scheme called Firstbuy Direct, 10,000 individuals will be helped to get on the housing ladder, filling the gap in the market left by Labour’s Homebuy Direct initiative, which ended last year.
The new scheme will help individuals buy newbuild properties, which should also support the construction industry. First-time buyers will need to raise only 5pc of the deposit themselves. The Government will provide 10pc and the remaining 10pc will come from the house-builder.
The government aid, structured as a loan, will be available to households earning less than £60,000. The loans would be interest free for five years, with borrowers paying 1.75pc interest the year after and then 1pc above inflation.
After yesterday’s inflation figures revealed that the price of petrol and diesel was increasing at a rate of 15.6pc, drivers will welcome the Chancellor's cut in fuel duty. The fuel duty rise of 1p per litre has been scrapped, and it will be cut by 1p from 6pm.

Low and middle-income earners

The personal allowance, the amount that people can earn free of tax, is to rise by £630 to £8,105 – on top of the £1,000 increase announced in the Emergency Budget last summer.
The move will benefit 25 million people and take 250,000 out of income tax altogether. Unlike the previous increase, which comes into effect next month, it will benefit those paying higher rate 40pc tax as well as those on lower incomes. But those earning more than £115,000 will not benefit from the increase.

Travellers

The Chancellor offered a small financial sweetener to travellers by freezing air passenger duty.

Investors

The level of income tax relief for enterprise investment schemes (EISs) will increase from 20pc to 30pc from April 2011. The Government will also increase the size of a company that can qualify as an EIS and raise the limit that can be invested in a firm by 400pc

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