Midst Train Strikes, Postal Strikes, Nurses and Fire Services balloting to strike, and costs of living rising at the highest rate for over 40 years, the BBC reporting that items that cost £100 a year ago already cost £111.10 today, the Chancellor Jeremy Hunt has announced his plans to fill what is being referred to as the black hole in our economy.
Some of his plans may sound to many initially positive, such an increase in taxation to energy companies, but as these costs are passed on to the users of the energy what is the real impact to you? The devil is in the detail as tax allowances are frozen or reduced, impacting people and businesses alike.
Headline changes:
- State pensions and means tested disability benefits increase in line with inflation.
- Minimum wage for people over the age of 23 to increase from next April by 92 pence per hour.
- Household energy price cap extended for a further year but less generously, an estimated £3000 for an average household
- Targeted support payments for households on means tested benefits of £900, pensioner households £300 and individuals on disability benefit of £150
- Windfall tax on oil and gas firm profits increased from 25% to 35% and extended until March 2028
- From January companies that produce electricity have a new 45% tax
- Council Tax bills could rise without consultation by up to 3%, up from 2%
- Housing benefit remains frozen at 2020 levels
- Personal Income Tax allowance remains frozen at £12,570 up to £50,270 until 2028
- Higher rate taxation of 40% starts now at £125,140, down from £150,000
- Capital Gains tax allowance reduced in April from £12,300 to £6,000 and the following April to £3,000
- Dividend Tax allowance to reduce to £1000, and to £500 by April 2024
- Stamp duty cuts will be reversed in March 2025
- VAT threshold for businesses remains frozen at £85,000
As the Office of Budget Responsibility says household income will fall by 7% over the next 18 months, Labour accuses the Chancellor of picking the pockets of the Nation. There is a short-term benefit to be felt by some, but in the longer term the Chancellor is right that there are ‘very difficult times ahead’ for most of us.
