A LEADING Worcester accountant has gazed into his crystal ball and predicted what Chancellor George Osborne might have up his sleeve in his summer budget next week.

John Painter, managing partner at CB, Chartered Accountants, said: "The budget on July 8 has the potential to contain some interesting announcements as Mr Osborne delivers his first ‘all Tory’ budget since the Conservative election victory in May. Freed by the constraints of coalition, it is likely he will look to introduce measures which he has been, to date, prevented from doing. Some of these announcements we already know, as they were included in the Conservative manifesto prior to the election.

"The manifesto commitments include: legislation to prevent increases in VAT, National Insurance contributions and income tax in the next five years; an increase in personal allowance in 2017/18 from £10,600 to £11,000, to increase to £12,500 by 2020; an increase the 40p income tax threshold to £50,000 and legislation so that nobody working 30 hours on the Minimum Wage pays income tax on what they earn."

Other proposals could include the introduction of a new £175,000 per person transferable allowance for main residences when they are passed to children or grandchildren, which for many couples could give a total allowance of £1 million (£325,000 plus £175,000 each). This new allowance will be tapered away from those leaving more than £2 million with the intention that those leaving more than £2.35m will not benefit from the new allowance. The4re is also the prospect of reducing pension tax relief for those with an income of above £150,000 a year.

Mr Painter added: "The Chancellor will also detail the £12b of spending cuts that were promised as part of the Conservative manifesto. It is estimated the government needs to save about £1 in every £100 that it spends, but if these cuts are applied too fast it could jeopardise Britain's economic recovery. We will watch this budget with great interest."