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Spring Budget 2017 – how will it affect you?
The final spring budget gave us all a better idea of the way the economy stands at the moment and made some big changes, specifically to tax for the self-employed. Many of the changes may affect your household, your job and the services you interact with on a daily basis.
Here’s all you need to know about the coming changes announced in the recent budget:
- Personal tax allowance – Currently, anyone earning £11,000 or less a year does not pay any income tax on their earnings. From April 6th, this will rise to £11,500 and by 2020, it should rise again to £12,500.
- Car tax – Cars registered before April 2017 will see their car tax rise by inflation or RPI (retail price index).
- Fuel duty – This will be frozen for the seventh year in a row.
- Air passenger duty – This is the tax every person over 16 pays when they fly. It was a charge introduced in May 2015 and it is set to rise by RPI in 2018-19.
- Wine, beers and spirits tax – From 13th March, this is due to rise by RPI which equates to 2p on a pint of beer, 8p on a bottle of still wine, 10p on a bottle of sparkling wine and 36p on a bottle of spirit.
- Tobacco – Rising on the day of the budget, taking place straight after its announcement by the chancellor. Tobacco rose by 2% above RPI putting around 35p extra on a pack of 20 cigarettes.
The benefits system
- Child tax credit – From April, the third child and any subsequent children no longer qualify for the benefit, this will also apply to families on Universal Credit. The family element of child tax credits, which is currently worth £545, is also to be abolished.
- Tax credit debt – The department for work and pensions (DWP) will start working with a data company to recover tax credit overpayments. One way they are planning on doing this is by taking the debts straight from a person’s earnings.
- Benefit fraud and error – The government wants to do better when it comes to identifying fraud and error caused by undisclosed partners. This is when a couple live together but they have not declared it to the DWP and as a result, they may be claiming more or less than they are entitled to.
- NS&I bond – The government has promised to help savers for a while now, after a difficult few years, and this is one of their new measures. From April, anyone aged 16 or over will be able to save up to £3000 in one of these bonds and the interest rate will be fixed at 2.2% for three years. The bond itself will be available for the public to sign up to for 12 months.
- ISA limit – As the introduction of the lifetime ISA gets closer, there is good news for those who already have an ISA in place. From April 6th, the ISA limit will rise from £15,240 a year to £20,000 a year; for juniors, the limit will be £4,128 per year.
Schools, debt, consumer rights etc.
- Household savings – Official figures from the government show that 53% of households in the UK has less than £3000 in savings.
- Social care – There will be an extra £2 billion given to social care including £1 billion in 2017-18. £100m will go towards placing more GP’s in A&E for winter and £325m will go towards the first NHS Sustainability and Transformation plan.
- Consumer rights – The government is putting together a green paper to examine markets that aren’t working fairly or efficiently. The Competition and Markets Authority (CMA) will now be able to fine companies more easily for breaking the law. The paper will also look at making T&C’s simpler and shorter as well as trying to protect people from subscription traps which take place once a free trial elapses and consumers are charged for a subscription they may not want.
- Schools – An upgrade fund of £216m will be made available for existing schools to improve their buildings while £320m will be made available for 110 new free schools and grammar schools.
- School transport – Children who receive free school meals or whose parents get the maximum amount of working tax credits will now be able to get free transport to the nearest selective school.
- Probate – The fees for probate will be changing soon which means it will cost significantly more to deal with larger estates.
Over the next few months, plenty of changes will be taking place to many of the services we rely on every day so it is worth becoming familiar with the changes and planning for how they will affect you. If you have any concerns about anything such as tax or savings, you should get in touch with the relevant specialist or Citizens Advice.