While George Osborne has been accused of bringing in a budget which is antigrowth for the UK business arena his promise to reduce corporation tax next year to 27% and a further 1% each year for the next three years has been well received by the business arena. Indeed we will also see corporation tax for small companies reduced to 20% which could prove vital in the short to medium term as businesses look to maintain as much liquidity within their operations as possible.
David Cameron has broken one of his "loose" general election pledges with an increase in VAT from 17.5% to 20% from 4 January 2011. However, unlike the scare mongers would have you believe, there will be no VAT introduction for children's clothes, magazines and other exempt areas. While the increase in general VAT to 20% at the beginning of 2011 is a blow and will affect every area of the UK economy it should raise significant money for the UK government to reduce the budget deficit in the short to medium term.
George Osborne has just delivered the coalition government's emergency budget which obviously contained massive public-sector spending cuts and tax increases but was on the whole not as aggressive as earlier leaks from 11 Downing St. had suggested. So did George Osborne leave the public expecting a worse budget than he actually delivered?
There is speculation and counter speculation regarding the UK budget, potential tax increases and potential cutbacks in public sector spending. However, one thing is for certain, each and every person and each and every business in the UK will feel the pain, although to a differing extent, due in the main to massive public sector spending cuts.
Rumours of an increase in capital gains tax to as high as 50%, in line with the top income tax rate, do not make good reading for the investment arena and there are many who believe that it may be counterproductive. There's also the fact that capital gains tax is renowned as one of the most expensive taxes to collect and many experts are now questioning whether we actually need an increase in capital gains tax.
George Osborne will today announce an increase in personal allowances which will take around 1 million people out of the income tax bracket. This is a move purely and simply designed to assist low income families in the UK as he continues his strategy of "making the rich pay". So will this work?
Tomorrow's budget will be a shock for many in the UK with the public-sector budget set to be slashed and taxes set to increase across the board. We have all seen the headlines, we have all heard the doom and gloom from the experts but tomorrow will be a very different day, when reality kicks in and we realise that we will be paying for the credit crunch for many years to come. It is difficult to appreciate the problems which the UK government is facing with UK national debt set to top £1 trillion and the budget unlikely to be balanced for many years.
As George Osborne sets himself to deliver one of the most important speeches of his life, i.e. the emergency budget tomorrow, there is concern that EU interference in member country finances could undo some of his good work. For many years the UK has battled against a growing tide of anti-UK feeling from within the EU with many members believing that the UK is holding back further integration and further power grabbing.
In a move which will certainly upset the traditional core Conservative party support in the UK it would appear, from leaks emanating from 11 Downing St., that George Osborne is set to make UK banks and property owners pay the price for the depressed UK economy. There have been rumours for some time about a potential banking levy and the proposed increase in CGT could hit as high as 50%, on a par with the higher rate of income tax. So can George Osborne afford to hit banks and property owners?
This weekend's revelation that yet another Liberal Democrat MP has issues in his private life which would appear to be different to those presented to the public has cast a dark shadow over the Liberal Democrat party. While the Liberal Democrat MPs in question are not the only ones having private life issues in the Houses of Parliament it is the very fact that the Liberal Democratic Party attempted to take the moral high ground during the election campaign which is catching the eye of the public.
