The Government’s Budget
Yesterday, the Chancellor, Jeremy Hunt announced the government’s financial plans in the budget.
The main points announced were:
- Personal Taxes – there will be a reduction in the 45p tax threshold for people paying the top rate of tax from £150,000 to £125,140. People earning more than £150,000 per year will pay just over £1,200 more in tax per year.
- The personal tax threshold will be frozen until 2028 which means that millions of people will end up paying more in tax. It was previously frozen until 2026.
- The Chancellor has confirmed that the energy industry’s windfall tax will increase from 25% to 35% from January 1.
- Electric vehicles will no longer be exempt from the Vehicle Excise Duty from April 2025 to make the motoring tax system fairer.
- The Chancellor says he is committed to helping people raise their income, find work and become financially independent. He has announced that he will ask over 600,000 more people on universal credit to meet with a work coach so they can get the support they need to increase their work hours or earnings.
- Another £280m will be invested to help the Department of Work and Pensions to crack down on benefit fraud and errors in the next two years.
- The government will review the pension age which will be published in early 2023.
- £155 billion will be spent on helping households and businesses.
- There will be support for those on low incomes, disability benefits and pensioners. These being: £900 to people on benefits, £300 to pensioners, and £150 to people with disability benefits.
- The living wage for over-23s will increase to £10.42 from April next year, it is currently £9.50.
- Benefits will rise in line with inflation, including Universal Credit, next April.
- Pensions will rise in line with inflation, seeing an increase by 10.1% from April.
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