George Osborne promises tax relief and cheaper bingo and beer in British budget speech

Measures revealed in fresh austerity budget before country goes to the polls next year

PUBLISHED : Thursday, 20 March, 2014, 1:44am
UPDATED : Thursday, 20 March, 2014, 1:44am

British Chancellor of the Exchequer George Osborne yesterday promised tax relief for households, a cap on welfare, help for savers and manufacturers, and lower costs for bingo and beer as the government prepares for next year's elections.

Osborne also said Britain would increase tax on residential properties purchased via a company by extending its scope from residential properties worth over £2 million (HK$25 million) to impose 15 per cent stamp duty on those worth more than £500,000.

"In 2012, Britain introduced stamp duty of up to 15 per cent for purchases of more than £2 million through a company. Wealthy buyers, especially in London, have used companies as a way to reduce tax liabilities," he said.

Osborne also announced upgrades to official forecasts for the country's economic growth but said he would stick to his belt-tightening plans.

His help to savers, who have been hurt by near-zero interest rates, included freeing up pension rules. But he sent shares in gambling firms tumbling with a new tax.

Britain goes to the polls in May 2015 and the annual budget plan is one of the government's last opportunities to make a difference to how people feel about their finances before then.

Osborne hopes the improving economy and his focus on austerity will be a trump card in the fight against the opposition Labour Party, which remains a few percentage points ahead of the Conservatives in polls.

But, in a surprise, Osborne increased the threshold at which British earners pay a tax rate of 40 per cent for the first time since the 2010 elections, something lawmakers in his Conservative party had been demanding.

He also announced the latest in a series of increases in the amount of money people can earn before paying income tax.

The new forecasts, meanwhile, painted a picture of solid economic recovery. The economy is now set to grow 2.7 per cent this year, according to the government's budget watchdog.

Osborne said the government would cap the amount it spends each year on welfare at £119 billion in the 2015-16 fiscal year in its bid to get rid of the budget deficit by 2018-19.