UK Budget 2005 - Main Points The Chancellor Gordon Brown has announced the 2.6% deficit as comparing favourably with the UK's competitors. The UK has the lowest debt burden of all. He stated that economic growth last year was 3.1% and also said there had been continued growth for the 50th consecutive quarter.
Gordon Brown said that he had met his Golden Rule with a margin of £6bn and that debt was running consistently at 40% of national income. Mr Brown said he was setting aside an extra £400m in defence expenditure. £27m will be set aside for the formation of a new sports foundation. Law and order with £3.5bn extra funding; £12bn extra or education, and £23bn more for health in 2007/8.
Mr Brown announced that the Government would be relocating 7,800 civil service jobs out of the London, thus sticking to the £21bn savings as outlined in the Gershon Report.
Beer will be up 1p a pint, wine up 4p a bottle, and 7p for a packet of cigarettes. Duty on fuel will be frozen.
Stamp duty threshold will be doubled to £120,000.
The inheritance tax threshold would be raised to £275,000 from April 6 and £285,000 next year and £300,000 in the following year.
The maximum amount that can be paid into a tax-free ISA will be held at £7000 for the next five years.
A pension credit would benefit 3.2m pensioner households, or 3.7m pensioners. Pensioners would also receive £200 council tax refund. The chancellor announced that pensioners would receive a £200 winter fuel allowance - or £300 for the over 80s. There would be free local bus travel for all pensioners from 2006.
Child tax credit is to rise by 13%, in line with earnings, over the next three years. Child benefit is to rise by 50p to £17 for the first child and up 35p to £11.40 for other children. 3m families will receive more in child tax credit and child benefit than they pay in taxes. He said the government would look at extending the child trust fund to secondary age children. He announced an increase in cash for primary schools - each typically getting over £100,000 in the next three years. He said that children should be in education from three to 18 years.
The Chancellor announced that in eight areas of the country all young employees would be offered training. The Teach for Britain programme for the most outstanding graduates to work in challenging schools would be extended.
The chancellor said direct cash to schools will increase - primary schools typically getting over £100,000 next three years.
Click here to access the full version of the 2005 Budget in pdf format. If you think you may be paying too much tax, and would like to have hundreds of legal tax avoidance tips at your disposal, take a look at our tax guide section.
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