George Osborne has delivered his 2012 Budget to the Commons, and as expected the 50p top rate of tax is being cut to 45p, a measure which will come into effect a year from now.
"We are earning our way out of trouble," the Chancellor said at the conclusion to his speech, insisting that the top rate of tax - introduced by the last government - had only encouraged tax avoidance and raised less than a third of the amount previously expected.
The chancellor also performed a major U-turn on cuts to child benefits for middle-incomes - but has angered pensioners by freezing their personal tax allowances.
Huffpost UK has gathered some industry experts and those directly affected by the changes for their views on the 2012 Budget
FULL BUDGET COVERAGE
Of all the budget preamble, not surprisingly perhaps, what was to become of child benefit was most discussed on the Mumsnet forums. The Chancellor’s 2010 announcement to remove it from households where a single earner paid higher rate tax had been strongly criticised on two counts:
First, the cliff edge effect – the loss of child benefit for higher rate tax payers that meant for some people there was a disincentive to take a promotion and a pay rise because the loss in child benefit was considerably more than the gain in salary. The Chancellor responded to that criticism and today announced that he would introducing a taper so there is an incremental loss as earnings rise from £50k to £60k as opposed to a one off forfeit. And although some may suspect that this taper will be complicated and expensive to administer, broadly it will be welcomed.
The bigger issue for Mumsnet users, though, was fairness and specifically that a single income household earning higher rate tax (£42,750) would lose child benefit whilst a next door household where there were two £40 000 earners would keep theirs.
The Chancellor’s response has been to raise the threshold at which you start to lose benefit to £50 000 but sadly, he has rather missed the point by failing to address single earners’ penalty. Under the new system a single earning household of 61k will lose all their child benefit but a household with two £50 000 earners (100k in total) will keep all of it. That penalises both lone and stay at home parents and, whatever you think of child benefit and who should get it, that kind of anomaly can't be fair.
On the wider budget there wasn’t too much to suggest it was the family-friendly version that George O promised us. Most squeezed middlers, I suspect, will approve of the rise in personal allowances but will want to know what effect that will have on tax credits and whether they’ll be drawn into higher rate tax by the new threshold changes. They’ll also, no doubt, be slightly nervous that the announcement of a rolling review of the state pension age will have us all working till we’re eighty. And they might take at look at the cut in the 50p tax rate and conclude that George Osborne in reality had other priorities than them.
Meet the rest of our panel: