Budget 2006 - the key battlegrounds
Wednesday, 22 March 2006 12:00
In the days and weeks leading up to the 2006 Budget a large number of banks, insurers, building societies, consumer groups and professional associations have been lobbying the chancellor to take action on certain key areas of personal finance.
With the 2006 Budget due to be released later today, MyFinances is outlining the key areas that may or may not be addressed by Gordon Brown.
However, no Budget occurs in isolation, with commentators seeing this year's effort likely to be dominated by the chancellor's wider political ambitions to take up residence in 10 Downing Street before the next election.
As such, a "boring Budget" is predicted - with little changes to major areas such as income tax, national insurance and VAT.
But regardless of the bigger picture, there are many areas of public and personal finance that people are calling on to be addressed.
Changes to stamp duty land tax - a key point in last year's Budget - are still seen as inadequate, and more action has been called for.
Additionally, more help is being called for to give first-time buyers a leg-up on the property ladder as their numbers continue to dwindle.
There are also calls to amend inheritance tax (full story), which is affecting ever-more Britons.
The expected Budget announcement that is making the most waves in the media is the predicted tax on 4x4 vehicles - with many commentators predicting a £200 charge for drivers of larger vehicles.
Other actions predicted by the majority of commentators include a crackdown on tax avoidance, and an announcement concerning long-term gilts - which are currently affecting the pensions market and seeing returns for pensioners drop.
Building societies are also calling for Mr Brown to use this Budget to encourage savings and help pensioners more.
Suggested measures include abolishing stamp duty for first-time buyers, raising the lower threshold (currently £120,000), or making people selling - rather than buying - homes pay the tax.
People are also calling for the chancellor to harmonise the amount people can save tax-free each year in an ISA. At the moment people can put up to £7,000 in stocks and shares, but only £3,000 in cash savings.
But regardless of what the chancellor announces in the 2006 Budget, the public are not expecting much.
Just one person in nine thinks the Budget will have a positive impact on their finances, with around one in three thinking it will have a negative impact, figures from Nationwide show.
"Consumers are not expecting to hear much in the way of good news from the chancellor in this year's Budget report," said Nationwide's chief executive Philip Williamson.
"Homeowners in particular expect the Budget to bring nothing but bad news. However, we are calling on the chancellor to surprise us all with some targeted announcements to support savers and first-time buyers."
Comments
Newsletter sign up