A new, increased rate of stamp duty is to be introduced for buy-to-let and second homes. This will be three per cent higher than the normal rate and takes effect from April next year. The Chancellor said this will raise £1billion by 2021, although there are concerns it will have a significant impact on the buy-to-let sector.
Following intense criticism, some of which came from his own MPs, Mr Osborne announced that plans to cut tax credits by £4.4billion would be scrapped altogether. The Chancellor said he had listened to people’s concerns and would be abandoning the policy. He said the change in tack had been made possible by an improvement in public finances.
The climb-down means that the welfare cap will be breached in the early years of this Parliament, but Mr Osborne is confident that it will be met before the next General Election.
The Welsh Assembly is to be handed powers to set its own rates of income tax without the need for a national referendum.
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