July Budget 2015: From benefits caps and child tax credits cuts to pension and inheritance tax changes, here’s what to expect

Tomorrow, George Osborne takes to the despatch box for his first truly Conservative Budget – indeed, the first majority Conservative Budget since 1996. The chancellor is notoriously good at trailing the contents of his Budgets before he stands up – so what do we know so far?

Cuts to the welfare bill

The chancellor has insisted he is going to cut £12bn from the annual welfare budget in two years, as part of a bid to balance the books. That’s out of a total welfare bill of £220bn, which includes benefits, tax credits and state pensions.
The Prime Minister has vowed to protect £95bn of pensions and universal benefits, including child benefits. So, that £12bn will be cut mostly from those of working age payments, likely to be child tax credits and housing benefits. "He's announced about £2bn [of cuts] and we know nothing about where the further £10bn are coming from," said Paul Johnson, director of the Institute for Fiscal Studies (IFS).

So, looking for other cuts, here is a look at what hasn’t been explicitly protected:

Some combination of those benefits must be cut if the government is to reach its £12bn reduction. That's likely to come from:

Child tax credits: around four million people receive them, getting £545 per year as a flat rate payment, plus up to £2,780 per child. The PM has already said he wants to stop this “merry-go-round”
Subsidised housing: 340,000 people who live in housing association and local authority properties on incomes of more than £40,000 in London and £30,000 in the rest of England will have to start paying market rents, or at least close to market rents, from 2017-18
Benefits caps: This is currently £26,000 across the country, which the government plans to cut to £23,000 in London and lower (around £20,000) across the rest of the country
Housing benefit: could be taken from 18-21 year olds who are also claiming jobseekers’ allowance

Other areas

The BBC will be expected to take on the £650m per year it costs for providing free television licences for the over 75s, by making cuts to its budget
A clampdown on non-domicile residents, which the government will pursue against tax evasion and aggressive tax avoidance to attempt to raise £5bn
The inheritance tax threshold will increase to £1m for couples from 2017. The “family home allowance” is worth £175,000 per person, in addition to the £325,000 tax-free allowance. Estates of individuals who die and pass on assets worth up to £500,000, including a home, will be charged no inheritance tax whatsoever
The Conservative manifesto pledged to alter the amount that can be put tax-free each year into private pension pots, which is likely to mean anyone earning £150,000 a year will be able to put £40,000 a year into their pension. On a sliding scale, those earning £210,000 a year will be able to put £10,000 away
The BBC has reported that the UK’s main sickness benefit, Employment and Support Allowance, could be scrapped
An estimated £30bn will be cut from unprotected government departments
Shops across the country will be able to stay open for longer on Sundays

What's less likely

The top rate of tax is unlikely to fall to 40p, despite calls from Conservative MPs
The government has ruled out increases in VAT, income tax and national insurance contributions

Announcements from previous Budgets

Personal allowance to increase from £10,600 in 2015-16 to £10,800 in 2016-17. By the end of this parliament, the government has said this figure will reach £12,500
Tax-free personal savings allowance to apply for the first £1,000 of interest earned on savings for basic rate taxpayers, and the first £500 for high rate taxpayers from April 2016
The amount that can be saved in a tax-free pension over the course of a lifetime will fall from £1,25m to £1m from April 2016
The National Minimum Wage is to increase by 20p an hour to £6.70 from October
The threshold for paying the 40 per cent rate of income tax is to rise from £42,385 to £43,300 in 2017-18. By 2020-21, the Conservative manifesto said this number will rise to £50,000
A Help to Buy ISA will launch in the autumn, where the government will top up every £200 saved for a deposit by £50, up to a top –up limit of £3,000