Budget day is almost over! Who will benefit most from Chancellor Jeremy Hunt’s Budget statement, and who is set to lose out? Let’s take a look…
Winners
Workers
A cut in national insurance could save the average worker £450 a year, adding up to a £900 saving for 27 million employees when combined with a cut last autumn.
Jeremy Hunt made the 2p cut in national insurance for workers and the self-employed the centrepiece of a tax-cutting Budget.
He said the cut, which will come in from April, will result in the lowest effective personal tax rate since 1975 and could result in getting the equivalent of 200,000 more people in work.
Savers
The Government has announced the introduction of a new British ISA to encourage investment in UK companies and boost the City.
It will give people an additional £5,000 tax-free allowance to invest in UK assets, on top of the existing £20,000 limit.
Drinkers
The Chancellor has extended a freeze on alcohol duty until February next year. Mr Hunt, who announced a freeze in the autumn statement until August this year, said it would have been due to rise by 3% without the extension.
Drivers
The freeze in fuel duty has been extended for a further year as the Government is extending the temporary 5p cut in fuel duty rates. The Treasury said it was “supporting motorists across the country… saving an average of £250 per car since the cut was introduced in 2022”. The Chancellor said the decision, alongside the freeze in alcohol duty, also helped the fight against inflation.
Those who sell a second home
The higher rate of capital gains tax for those who sell a property other than their main residence will fall from 28% to 24%.
Small businesses
The threshold for VAT registration will rise from £85,000 to £90,000 from April 1. “We should reward smaller businesses who make a big impact on our society and employ millions of people,” the Treasury said.
Working parents
The Government will guarantee pay rates to childcare providers for the next two years, in order to deliver on its care offer for children over nine months old. The package is aimed at getting more working age parents back into work while they juggle caring responsibilities.
Child benefit recipients
Around 170,000 families will be taken out of paying a tax charge, under reforms unveiled in the Budget.
The Government will increase the threshold at which the high income child benefit charge starts to be charged from £50,000 to £60,000, from April.
The charge had been triggered when one parent in a household claiming child benefit has taxable income of £50,000 or more – but the threshold has been criticised for falling unfairly on the shoulders of single parents, as it is based on the income of the highest earner.
It has meant a couple could earn £49,999 each and still receive all their child benefit.
Losers
Non-doms
The special tax status for non-domiciled individuals in the UK, which allows them to pay tax on only their UK earnings, will be abolished.
It will be replaced with a simpler system from April 2025, which Mr Hunt said would be more generous for the first four years, with non-doms having to pay more tax after that point.
This is expected to raise £2.7 billion a year in taxes, and will be used to help cut taxes for households.
Vapers and other smokers
The Government is to introduce a new tax on vapes in a bid to discourage non-smokers from taking up the habit.
During his Budget speech, Mr Hunt told the Commons he was confirming “the introduction of an excise duty on vaping products from October 2026 and publishing a consultation on its design”.
However, he said that because vapes “play a positive role” in helping smokers quit, there will also be a one-off increase in tobacco duty to ensure vaping remains cheaper than smoking.
Pensioners and others whose income is unearned
While a cut in income tax would benefit anyone whose income exceeds the tax-free personal allowance, the cut in NI will apply only to income earned by employees. Those who depend on “unearned” income such as pensions or dividends will not be better off.
Business class passengers
Mr Hunt announced higher rates of air passenger duty on business class tickets.
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