Workers
As was widely predicted, the personal tax allowance – the amount you earn before you pay Income Tax – is being increased. It is increasing to £10,800 next year, then £11,000 the year after. This is a tax cut for 27 million people.
The threshold before you start paying the higher rate of tax is also being increased to £43,300 from 2017/18.
First-time buyers
The Government is launching a new Help-to-Buy ISA to help first-time buyers get the money together for a deposit in order to buy their first home. For every £200 you save in the Help-to-Buy ISA, the Government will top it up by an extra £50, up to a maximum of £3,000 from the Government.
Savers
A couple of changes were announced for savers. First of all, from this autumn ISAs will be made “radically more flexible”. The idea is that you will be able to take money out of your ISA, and then put it back in later on in the year, without losing any of your tax-free entitlement. The Chancellor promised to expand what investments can be kept within an ISA too, which is likely a reference to peer-to-peer lending.
[SPOTLIGHT]There is also a new personal savings allowance. From April 2016, the first £1,000 of interest you earn on savings will be free of tax. If you are a higher rate taxpayer, you will be eligible for a £500 tax-free allowance.
The Government claims this means a whopping 17 million people will now pay no tax on their savings.
Enjoy a better return on your cash with a Stocks & Shares ISA
Drinkers
For the third straight year, beer duty is being reduced by a further 1p a pint. In addition, the duties on spirits and cider are being reduced by 2%, while the duty on wine will be frozen.
Drivers
The fuel duty increase, which was due to take place in September, has now been postponed.
Businesses
Corporation tax is to fall to 20% from this April, the joint lowest in the G20.
Those who fill out tax returns
The annual tax return is to be abolished, with details uploaded automatically online into a new digital account.
Those who want to sell their annuities
Even before the Budget speech itself, the Government confirmed that pensioners with annuities will be able to sell them to insurers from April 2016. The idea is to ensure those who are already in retirement will not miss out on the extra freedoms being brought in from this April.
The low paid
Another announcement made before the speech itself was that the National Minimum Wage will be increasing by 20p to £6.70 an hour from October.
Churches
The Chancellor announced that he was more than trebling the initial £15 million available to churches to fix their roofs.
Losers
Big pension savers
The pension lifetime allowance is being cut from £1.25 million to £1 million from next year. Just last year the lifetime allowance stood at £1.5 million, so it has been dramatically cut in a short period of time.
However, from 2018 it will be indexed, so that the allowance will rise in line with inflation.
Banks
The bank levy has not only been successful in raising some extra revenue, it’s also pretty popular with the general public. It is being increased again, from 0.156% to 0.21% and will now raise around £900 million a year.
Tax dodgers
A number of tax loopholes are being closed, which the Government claims will raise £3.1 billion. Further details will be announced tomorrow.