Chancellor George Osborne delivered his Budget to the House of Commons today (March 16), with some key policies being highlighted including sugar tax and options for a 'lifetime ISA'.
George Osborne
Here we break down some of the major announcements and take a look at the effects they may have on the future.
£1.5 billion to extend school day and turn all places of education into academies
Ahead of his Budget statement today, Osborne said: "It is simply unacceptable that Britain continues to sit too low down the global league tables for education. So I'm going to get on with finishing the job we started five years ago, to drive up standards and set schools free from the shackles of local bureaucracy."
This means the Government will work on converting all council-run schools to academies by 2020, and Osborne has plans for them to extend school days by an hour with an injection of £1.5 billion.
£1.2 billion cut to disability benefits
The disabled community in the UK will face a huge hit as £1.2 billion is cut from their benefits. Though the Chancellor has said the money will be "better targeted" at those who need it the most, Green party politician Caroline Lucas has branded him a hypocrite.
Labour leader Jeremy Corbyn was also left unimpressed and seemed to leave Osborne squirming:
Sugar tax
The soft drinks industry may face a hit when sugar tax is introduced in two years time through two separate bands. One will be for total sugar content above five grams per 100 millilitres, whilst the second higher band for the most sugary drinks will be for those with more than eight grams per 100 millilitres.
Pure fruit juices and milk-based drinks will be excluded from this tax and the Chancellor has promised companies will have enough time to reduce their sugar content before the tax is introduced.
Lifetime ISA
People aged between 18 to 40 will be able to save up to £4,000 per year in a new 'lifetime ISA', with Osborne claiming that for every £4 people claim, the Government will give them £1 up to £1,000 bonus per year.
This may be a move by the Government to cut back on the amount of people using tax-free cash ISAs and will be available from April 2017.
40% tax threshold increases
April 2017 will also see the higher rate tax threshold increased to £45,000 from £42,385. This will lift over 500,000 people who were paying the higher rate out of the higher tax band completely.
Tax-free personal allowance of £11,500
Osborne says that 31 million people will be paying less tax with 1.3 million of the lowest paid being taken out of tax altogether when the tax-free personal allowance is raised to £11,500 next year.
April 1 of this year will see the amount raised to £11,000.
Fuel duty frozen
For the sixth year in a row, fuel duty will be frozen resulting in a saving of £75 per year for the average driver according to Osborne.
Alcohol duties frozen
Beer, cider and spirits are also to have their duties frozen, but cigarettes and wine are to become more expensive as they're not included in the exemption.
Capital Gains Tax to be cut to 20%
The higher rate of Capital Gains Tax will be cut from 28% to 20% this April with the basic rate also cut from 18% to 10%. This tax is on the gain you make when selling something which has gone up on value and is paid at a basic or higher rate depending on your Income Tax rate. It applies only to additional homes rather than to main homes.
Corporation tax cut
By April 2020 the Government is promising to cut the rate of corporation tax to 17% from the 28% it was at the start of the last parliament and the 20% it was at the start of the current session.
New tax allowances for sharing economy earned cash
April next year will see two new tax-free £1,000 allowances added - one for goods you sell or for providing services, with the second for income from property you own.
Those who make £1,000 from occasional jobs will no longer need to pay tax on that income, and those who make their first £1,000 of income from property will also be tax free up until that cap.
Insurance Premium Tax increase to fund flood defences
A second increase to the insurance premium tax in the space of a single year has been announced, with Osborne using the money from this to fund flood defences. He says the amount raised for flood defences should total £700 million.
Growth forecasts downgraded
Revisions were made to growth forecasts for this year. Originally at 2.4%, that percentage has now been downgraded to 2% by the OBR, and is predicted to rise to 2.2% in 2017 and 2.1% in the three years following.
This slowing growth rate is reportedly due to global market concerns around demand from China, lowering the price of oil and badly affecting the returns Scotland's North Sea has seen.
Budget surplus for Britain
Britain's now on course for a budget surplus by the end of this parliament, with the country set for a surplus of £10.4 billion in 2019-20, which will rise to £11 billion the year after.
Small business rate relief increase
Raising the small business rate relief from £6,000 to £15,000 and from £18,000 to £51,000 for the higher rate, Osborne says 600,000 small businesses would go on to pay no business rates at all from April 2017.
This would, he says result in a saving of £6,000.
Government spending cuts
A further £3.5 billion of cuts will be made to Government spending by 2019-20.