Budget gives tax cuts for some, but tough times for others
TODAY'S UK Government budget could see tax cuts for some but tough times elsewhere. DAVID DEANS reports, while chartered accountants Kilsby and Williams analyse how the budget may affect you.
A TAX cut for beer and a hold on fuel duty were among the measures announced in today's UK Government budget.
However the chancellor George Osborne painted a gloomy picture of tough times ahead with the official growth forecast for this year slashed in half.
It was announced that:
- Beer duty tax will be cut by 1p a pint.
- This September's planned 3p fuel duty rise will not take place.
- Personal Income tax allowances will rise to £10,000 in 2014.
- Firms will not have to pay the first £2,000 of an employee's National Insurance bill.
- A public sector pay cap of one per cent will be extended by a year to 2015/16.
- The Welsh Government will be able to spend extra £161 million on capital spending - although the Welsh Government said it will need to save £113 million on its revenue account over the next two years.
- Tax free child care vouchers worth £1,200 per child and increased support for families with children.
Newport-based Arfur Daley, organiser of CAMRA's Gwent Welsh Beer and Cider Festival, welcomed the cut to beer duty but said it was unlikely to bring back many of the pubs lost in recent years.
"If you look at somewhere like Newport city centre a lot of the pubs are shut there and I can't see them reopening," he said.
Terry Hicks of Caldicot haulage firm Hicks Logistics, said the scrapping of the planned 3p rise in fuel duty was helpful, saying it could have cost him another £23,000 a year but said more could be done.
"We're investing in growth and buying new assets and property at the moment. We're not getting any help with that at all," he said.
A WEALTHY COUPLE
A wealthy couple who earn £240,000 per annum between them. They have no children and enjoy a bottle or two of good quality wine with their evening meal.
As a result of the announcements today, the couple will find themselves just under £200 better off per month from April 2013, mainly due to the reduction in the top rate of tax from 50 per cent to 45 per cent.
The increase in alcohol duty on wine of 10 pence per bottle will mean they need to spend £4.33 more per month to fund their habit.
A LOWER INCOME FAMILY
A one - income lower middle class family earning £30,000 per annum where the wife stays home and looks two children. At present, the husband takes home on average £2,780 per month.
The Budget changes will see the family better off by £30.48 per month from this April as a result of the increase in the personal allowance to £9,440. The additional increase in the personal allowance to £10,000 in a year’s time will give them a further £9.33 to spend.
If the wife wanted to go back to work the Chancellor announced some help for childcare costs from Autumn 2015.
A SINGLE PARENT FAMILY
A single parent family where the mother works on average 18 hours a week earning £9,000 per annum.
The increase in the personal allowance up to £9,440 in April 2013 will take her completely out of the income tax, although she will not benefit from the increased personal allowance in 2014. The slight increases in the child and lone parent elements of the working tax credits mean she will also receive an additional £1.30 per week in benefits.
A RETIRED COUPLE
A retired couple, both over 74 who live off their state pension supplemented by a small personal pension of £7,000 per annum.
From April this year, their revised monthly income will increase by £9.36 as a result of the increase in the state pension. However, they will not be affected by the proposed plans to introduce a single tier pension in 2016 since these changes only apply to the newly retired.
A SINGLE MAN
A single man earning £21,000 per annum who drives a second hand Ford Focus doing an annual mileage of 12,000. He smokes 10 cigarettes a day and enjoys the occasional drink with friends, consuming on average 10 pints a week.
He will see his take home pay increase by £5.93 a week from this April and by an extra £2.33 per week from next April when the personal allowance increases to £10,000.
However, £1.37 of this will be clawed back in extra duty on his weekly cigarette consumption.
The one consolation is that the Chancellor reduced the alcohol duty on beer.