UK Budget 2015: Osborne moves on bank levy, corporation tax to be cut further

The UK economy is fundamentally stronger than five years ago with two million more jobs having been created, according Chancellor George Osborne.

In his opening remarks of the 2015 UK "emergency" budget, the first financial statement by a majority Conservative Government in nearly 20 years, Osborne said: "This is a budget that sets out a plan for Britain for the next five years to keep moving us from a low wage, high tax, high welfare economy; to the higher wage, lower tax, lower welfare country we intend to create."

Citing the Office for Budget Responsibility (OBR), Osborne said the UK deficit was 10.2% of national income in 2010. “This year it's expected to be 3.7% and 2.2% in 2016-17.”

Sounding cautious, he added, "The UK has turned a corner and left behind the age of irresponsibility. The greatest mistake this country could make would be to think all our problems are solved.”

Referring to the Greek debt crisis, Osborne said, “You only have to look at the crisis unfolding in Greece as I speak, to realise that if a country's not in control of its borrowing, the borrowing takes control of the country."

UK borrowing would be £69.5bn for the current fiscal year, £43.1bn for the next fiscal year and £23.3bn in 2017-18. Following that, it would be £6.4bn in the year to April 2019.

In line with market expectations, Osborne said the HM Treasury would "gradually reduce the bank levy rate over the next six years."

"After that, we'll make sure it no longer applies to worldwide balance sheets of banks." Additionally, the Treasury would introduce an 8% surcharge on bank profits from 1 January 2016.

Osborne also announced that headline corporation tax, currently at 20%, would be cut again to 19% in 2017 in a bid to create more jobs. It will subsequently fall to 18% by 2020.

As widely reported, the option to relax Sunday trading hours will pass on to local councils and their mayors who will have the power to set the hours in their areas. "Let local people decide," the chancellor said.

Moving on to Inheritance Tax, Osborne opined that wanting to pass something onto your children is the most "basic, human and natural aspiration there is."

From 2017, there will be a new £175,000 allowance on homes left to children or grandchildren, allowing £1 million to be passed on tax-free, announced the chancellor, fulfilling a pre-election pledge.