Tax
Income tax
* From April 2012 personal allowance will increase by £630 to £8105.
* This increase won’t be restricted to basic rate tax payers so no one else will be pulled into the higher rate tax band.
* The 50% tax rate will be reviewed and potentially removed if it has not generated sufficient revenue.

National insurance

* Income tax & National Insurance may be merged to a single tax if it is viable to do so.
* However, this will not result in pensioners having to pay National Insurance.
* The 1% National Insurance increase scheduled for April 2011 will go ahead as planned.

Inheritance tax
* The Inheritance Tax Rate will be reduced by 10% for anyone who leaves 10% or more of their estate to charity.

Other tax
* From April 2012 the thresholds for Income Tax, National Insurance, ISAs and Inheritance Tax will increase by the CPI measure of inflation instead of by RPI.
* Taxes on owners of high value property will be reformed.
* Measures to clamp down on tax avoidance will be introduced.
* Income tax relief on the Enterprise Investment Scheme will increase from 20% to 30% in April, 2011.

Housing
First time buyers
* £250 million commitment has been made to help first time buyers.
* A new shared equity scheme – First Buy – will help 10,000 families to purchase a new build home.

Mortgage Support
* The Support for Mortgage Interest scheme will be extended for another year.

Council tax
* Every council across the UK has agreed to freeze council tax for the coming year.

Water bills
* Public money will be used to help cut water bills for customers in the South West of England.

Alcohol & Tobacco
Alcohol
* A reduced rate of tax will apply to low strength beers from 1st October, 2011.
* A higher rate of tax will be applied to high strength beers from this date.
* There will be no change to any other alcohol duty rates.

Tobacco
* Tobacco duty rates to increase by 2% above inflation.
* Tax on hand-rolled tobacco will increase by an additional 10%.

Transport
Fuel
* Fuel duty will be cut by 1p a litre from 6pm today (23rd March, 2011).
* The planned 1p increase in fuel duty scheduled for April will be pushed back a year.
* The subsequent inflation-linked rise scheduled for April 2012 will be pushed back until the following summer.
* A Fair Fuel Stabiliser will be introduced from tomorrow – fuel duty will go down when fuel prices increase, & go up when fuel prices fall.
* The fuel duty escalator will be scrapped for the rest of this Parliament.
* A rural fuel duty scheme will be piloted.

Approved mileage allowance
* Approved mileage allowance payments will increase to 45p a mile for the first 10,000 miles & 25p a mile thereafter.
* It will also be paid for volunteers travelling as passengers.

Road tax
* Vehicle Exercise Duty will increase by inflation only.

Trains
* £200 million will be invested in regional railways.

Flights
* The planned increase in air passenger duty will be delayed until next year.

Employment & Education
Employment
* A new start up scheme to support entrepreneurs – Start Up Britain – will be launched.
* 21 new enterprise zones will be introduced.
* Entrepreneur’s Relief will be doubled to £10 million on 6th April.

Education
* 24 new university technical colleges will be set up.
* 100,000 places in new work experience schemes will be introduced.
* 50,000 apprenticeship places will be created over the next four years.

Pensions
State pension
* A new, single tier, flat rate pension based on contributions will be introduced subject to a consultation.
* This will be worth approximately £140 a week but it will take years to implement.
* Current pensioners won’t be affected by the change.
* Plans to introduce automatic increases to the State Pension Age have been brought forward subject to review.

Public sector pensions
* Public sector workers will have to increase their pension contributions by approx. 3%.
* The government will consult on scrapping final salary pensions for public sector workers & replacing them with career average pension benefits.

For further information and to discuss your thoughts on the 2011 Budget speech visit the money.co.uk budget special.

2010 The Financial Year in Review is presented by money.co.uk, who have gathered together the key financial and economical news stories from the year into monthly headlines that can be clicked on to display each news story in full.

It is a stunning presentation so visit the money.co.uk website to view.

Getting into debt has become an integral part of growing up it appears and we must all have witnessed at some time or other the heartbreak that this awful addiction has inflicted upon family members and people that we know.

The surprise is that it continues unabated, our ‘must have it now society’ is fuelled by easy borrowing and credit cards despite the banks making it more difficult to do so.

There is also no longer any stigma attached to the process of being made bankrupt and the consequences thereafter, it is almost seen as part and parcel of the deal, made all the easier in recent times by companies specialising in this area who can rid personal debts at the click of a finger while lining their own pockets.

The credit crunch has only served to highlight the problem that has been growing year on year for decades and it is quite scary seeing the details from this infographic and wondering what the future holds for a nation that is unable to pay its way out of debt.

Infographic by Money Debt & Credit

• We would like to thank the charity Credit Action for their help with core statistics

Although there was a drop in the figures during the final three months of 2010, officials have suggested that this may have more to do with the adverse weather conditions suffered, preventing from people attending court,a more sympathetic attitude from lenders or people putting off insolvency until the new year.

The overall figure for personal insovencies during 2010 wa s recorded at 135,089.

Out of that figure 59,194 took the traditional bankruptcy route, while 50,716 chose to enter into an Individual Voluntary Arrangement (IVA) which allow a deal to be struck between debtors and creditors.

There were also 25,179 Debt Relief Orders – a relatively new style of insolvency for relatively low debts.

• Bankruptcy: The traditional way of escaping overwhelming debt. Ends after one year, but you are likely to lose all your assets including your house to pay something to the creditor
• Individual voluntary arrangement (IVA): A deal between you and your creditors, overseen by an insolvency practitioner. Less stigma, less chance of losing your home, but involves paying some of your debts in one go or over a number of years
• Debt Relief Orders: Introduced in April 2009, these allow consumers with debts of less than £15,000 and minimal assets or surplus income to write off debts without a full-blown bankruptcy

While personal insolvencies reached a new high there was surprising news that the number of businesses in England going bust fell by 23% in 2010.

Despite going through several recessions and dips in economy this theory pretty much held true – that is up until the start of the financial crisis, when many investors and buy to let entrepreneurs well and truly had their fingers burned.

While most of us were happy to see our property increase in value over the years the credit crunch has returned the market to status quo, where our homes are once again, not an investment, but our castles.

The same can be said for most of the developed world and particularly in European countries such as Spain and France where many Brit’s have found themselves owning properties that have fallen in value over the last couple of years.

Buying abroad has always been a minefield, but the effects of the credit crunch have at least led to developers reducing ridiculously inflated prices and being more realistic about property values in certain areas.

One such development I recently came across offering property for sale in Cyprus is currently offering up to 30% off their 2010 prices to buyers willing to agree a deal before the end of March.

Interestingly the real estate agents of the Alexander Heights development are offering extraordinary deals on inspection trips that include three nights accommodation in the five star Inter Continental Hotel for prospective clients, with the agents picking up the tab.

Alexander Heights is an exclusive development set in the recently opened luxury resort of Aphrodite Hills, the first ever golf, leisure and real estate development in Cyprus.

The real estate agents require prospective clients to fill in a questionnaire prior to their trip to the Mediterranean island enabling them to design the perfect tailor made inspection visit package to suit each potential buyer.

On top of the hotel accommodation Alexander Heights will cover costs of transfers to and from the airport, a choice of a round of golf, game of tennis or spa treatment.

Special sight seeing trips and lunch or dinner packages may also be added to the free package and of course in the event of a property being purchased during the inspection trip, flight expenses will also be reimbursed.

Perhaps most importantly the company offer an attractive finance scheme to suit most purchasers.

British Weather Services hold a daily historic database of UK weather for over 250 UK and Irish weather stations. The database provides details on all aspects of weather, from air temperature and wind speeds through to snow depths and sunshine.

Senor Risk Meteorologist Jim Dale says, “For every drop of rain or flake of snow, for every fall and rise in temperature there is a commensurate rise and fall in the demand and supply of the UK’s good and services.  It’s our job to provide to companies big and small the very telling figures that link the weather numbers with what actually went on re performance.”

While it is difficult to argue that adverse weather conditions in late November and December would have impacted on UK plc, there are two sides to every story as Jim Dale explains;

“Where there is a weather loser there tends to be a weather winner on the opposite end of the fence, so construction and high street shops may have had it bad for example, but retailers selling cold weather items such as winter clothing, motor factors and comfort foods would have done well out of the ice and snow, not to mention warm and inviting indoor shopping centres, many of which boasted record footfall figures during the period.  Indeed, recent financial reports from some of our biggest companies indicate a mixed pattern of returns, precisely what we would expect to see during a lengthy period of extreme weather.”

British Weather Services, who also have insurance related schemes that protect firms against extreme events, suggest that the weather can only be partially responsible for the GDP fall, given that October and most of November were reasonably benign weather-wise.

Jim finishes by saying “It is far too convenient for George Osborne to lump everything on to the back of weather and not to take into consideration the many nuances of weather impact.  George Osborne is guessing, he doesn’t really know and he’s using the poor weather as a shield – very much akin to companies who year in year out do nothing about weather mitigation and use the same excuse.  He should know better but sadly doesn’t.”

It is doubtful that there are many companies who have not had to make cutbacks enough in their business without having to look at cutting profits too.

Increases in the cost of fuel and energy alone mean that customers should already be paying more for a product than they were 12 months ago, but in many cases these increases have been absorbed by suppliers desperate to take an order.

This is all well and good if the customer pays for the goods promptly and within your company credit terms, but what happens when the outstanding account isn’t settled on time and what options are available to a business to collect the monies owing?

Some years ago during the last recession there was a lot of talk from the government to outlaw bad payers who were causing many small businesses the same problem as they are now. Predictably, despite talking the talk little was changed at government level and the problem still exists.

No matter how much you need an order it has little value if you spend the next six months chasing payment and no value at all if that customer goes bust.

These are things that should be considered before accepting any order but particularly from a company that you have not sold to previously.

The minimum that should be done is to pay a small fee to have a credit check done, but even that maybe too little as the data available can often be out of date and is based on the history of the client.

In these uncertain times it is worth employing the expertise of a company that makes credit risk assessment of your potential clients for you. They will offer a range of credit risk solutions often tailored specifically for your business.

Their assessment will allow you to make a more educated and accurate decision about the likelihood of them fulfilling their credit commitments as well as the affordability of their order.

You will probably be given historical balances and account status codes for the customer and in many cases can receive update alerts to give you a clearer picture of your customer and be aware of any changes in their credit status.

Minimising the risk at an early stage is the most sensible and cost effective way of dealing with new and existing accounts and will undoubtedly pay dividends further down the line.

Well the answer to that question is a resounding yes. One of the world’s leading producers of energy efficient solutions is ABB, who as a company are already helping to deliver major power savings without compromising performance.

ABB are able to supply lighting control systems that can deliver power savings of up to 50% and building automation that can save 60%, for instance.

So what exactly is holding countries around the world back from adopting this new generation of energy efficiency you might ask.

It is certainly something that the world’s energy professionals feel strongly enough about, indeed in a recent survey conducted by Bloomberg Businessweek Research Service and sponsored by ABB, an incredible 89% of respondents believed that government incentives trump markets in driving energy efficiency uptake by consumers.

‘Smart grid’ solutions facilitate the use of renewable energy and can help reduce energy demand, making them an increasingly attractive option.

Energy industry experts around the world are well aware of this and are stepping up calls for governments across the globe to take some positive action by offering incentives to further drive the adoption of energy efficiency and renewable energy.

Stronger policies that are most favored by industry stakeholders are those that focus first on improving and incentivizing smart grid technology and then funding energy efficiency measures and setting minimum energy efficiency standards.

Taken together, making efficiency a valued resource means applying the resources of government to prime the energy efficiency pump.

It is reassuring that there are companies like ABB who are already ahead of the game in delivering efficient and renewable energy technologies through new ’smart grids’ that are capable of integrating energy from various resources and distributing the power with minimal loss.

They are also involved with new technologies that will allow energy storage from renewable energy systems such as wind and solar power in the UK as well as creating the longest power transmission link in Brazil, where the power will be transported over 2,500 kilometres with 93% efficiency.

Now it is time for governments to start paying attention by listening to what the energy professionals have to say and maybe there will be a brighter future for us all with systems that not only use renewable energy but can also cut CO2 emissions and reduce consumption in cities by 30%.

Even though the ‘green shoots’ of recovery sprouted long ago – according to some economists, at least – the recovery in the lending markets remain slow. So what’s going on, and when are we likely to see real recovery?

A background

Before we can really discuss how things are likely to move forward, it’s important to have a proper understanding of what led to the credit crisis, and where we are now.

Before the credit crisis, financial institutions were basically lending money to people from a wide range of backgrounds – some comfortable financially, and some less so. Over time, however, this meant that some people borrowed money that they could not realistically afford to repay, often in the form of mortgages.

In short, there came a point when many people began to default on their debt repayments, with many more on the brink of doing so. Lenders reacted by reducing their lending, in an attempt to protect themselves from further damage.

With time (and a lot of government intervention), most of the banks are now back on relatively steady ground. But the lessons learnt from this crisis mean that lenders are still more cautious about who they lend to.

What next?

Most economists would agree that the wheels are already in motion. Lending levels are on the rise – albeit slowly – but it may be a while before we see anything like the kind of lending seen before the crisis.

Gross ‘consumer credit’ lending, for example, rose from £13.6bn in August 2009 to £14.6bn in August 2010. Back in August 2004, it stood at £18.2bn.

Lenders always have an incentive to lend – making money – but they are currently having to balance that with the continuing uncertainty in the economy. Slowly but surely, it’s likely that lending will increase in the coming months, unless anything else significant happens to damage everyone’s expectations for the economy.

It’s also important to note that lower lending is not all to do with the lenders. Demand is also in relatively short supply, partly due to caution about the economy in general, and partly because fewer people are in the position to consider borrowing money.

And not without good reason as the increase will burden all of us with more taxes to pay for everyday items at a time when many of us have already been forced to make cutbacks through low wages and unemployment over recent years.

We all know that we face a tough few years ahead but at present it is difficult to see where any growth in our economy is likely to come from.

Professor Phillip Booth, Editorial and Programme Director at the IEA, said that the move is the result of insufficient attention being paid to spending cuts.

He believes that the VAT rise is simply bad economics and important potential spending savings have been avoided for transparently political reasons.

“Government spending, despite the Chancellor’s proposed savings, needs to be cut further. We did not get ourselves into the current situation because taxes were too low but because government spending rose out of control. Ring-fencing the NHS budget whilst simultaneously increasing the foreign aid budget, for example, are simply indicative of politically-motivated profligacy and not good economics. Furthermore, proposed increases in pensions above the rate of inflation and the retention of quirks such as free bus travel and the winter fuel allowance cannot be justified given that they have led to the necessity to increase VAT.

If the government insists on increasing taxes, there are better candidates than a general VAT rise. However, today’s news should be a wake-up call that the spending cuts are insufficient. If the government wishes to prevent growth from stalling, it will cut spending further, not burden the population with an unnecessary tax rise.”