Chancellor Jeremy Hunt's Budget announcement set the stage for potential elections, focusing on significant tax and spending plans. Here's a breakdown of what his proposals mean for you:
National Insurance Cut: 27 million UK employees will benefit from a reduction in National Insurance rates, with a drop from 10% to 8% for those earning between £12,571 to £50,270 annually. This translates to savings of up to £754 per year for higher earners.
Tax Threshold Freeze: Income tax thresholds remain frozen until at least 2028, potentially pulling more individuals into higher tax brackets as wages rise, equating to a £40bn tax increase. By 2028, around 3.7 million more people are expected to pay income tax, with 2.7 million entering higher brackets.
Council Tax Rises: Council tax will increase across England, Wales, and Northern Ireland, with varying rates up to 21% in some areas.
Child Benefit Expansion: The threshold for losing child benefit increases to £60,000 from £50,000, benefiting 485,000 families, with estimated average gains of £1,260 per year.
Cost-of-Living Support: No additional cost-of-living payments were announced, but the Household Support Fund will be extended for another six months.
Fuel Duty Cut Extension: The 5p-a-litre fuel duty cut will continue for another year, saving the average driver an estimated £50.
Sin Taxes and British Isa: Duties on vaping and smoking will increase, while a new tax-free British Isa will allow savers to invest £5,000 annually in British businesses.
Property Tax Changes: Tax breaks for holiday let owners will be scrapped, and the higher rate of property capital gains tax will decrease from 28% to 24%.
Non-Dom Tax Status Abolished: Non-domiciled tax status will be abolished from April 2025, potentially increasing taxes for affected individuals.
Benefits, Pensions, and Wages: Universal credit and state pensions will rise by 6.7% and 8.5%, respectively, in April, while the National Living Wage will increase to £11.44 per hour for over-23s.
These measures represent a comprehensive overview of the financial landscape shaped by the Chancellor's Budget proposals. If you are interested in understanding how these measures may personally affect you, please speak with us.
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