RISHI Sunak announced a shake-up to alcohol taxes and Universal Credit in his Budget today.
But there were other changes hidden away in the government’s trove of Budget day documents too.
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Here we round up what’s changing beyond the Chancellor’s Budget day speech – including benefits, pensions and cigarettes.
The Budget at a glance:
Cigarette prices are rising
Cigarette prices are rising – but you won’t have heard Mr Sunak say so.
The cost of a packet of smokes and rolling tobacco usually rise each year and it’s no different in 2021.
In the government’s docs, it said: “Duty rates on all tobacco products will increase by RPI + 2%.
“The rate on hand-rolling tobacco will increase by RPI + 6% and the minimum excise tax will increase by RPI +3% this year.”
It means a 20-pack will soar by as much as 88p and the rise comes into effect from 6pm tonight.
Pensions boost for Brits on low-income
The government plans to close a loophole that more than one million Brits with less in their pensions.
When paying into a pension you get tax relief, but some who earn over £10,000 and below £12,570 are missing out because of the way they are paid.
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This so-called net pay anomaly means low income earners are missing out on £111m of tax relief from the government every year, according to Now Pensions.
The government has promised to fix the issue and plans to get a top-up system in place by 2024 that could boost people’s pensions by £54 a year on average.
Beck O’Connor, head of pensions at interactive investor said it “puts right a quirk of the pension taxation system that unfairly penalises low earners”.
Surplus earnings threshold extended
Hidden in the budget documents, the government has announced it will extend the increase in the Universal Credit surplus earnings threshold to April 2023.
The threshold was originally set to return to £300 in April 2022, but this has been extended.
If your earnings exceed £2,500 and your entitlement drops to zero then anything over that amount its moved into a later assessment period.
It then counts towards the later assessment period.
It means that you can’t earn a lot of money in one month and very little in other periods, according to entiledto, and still be entitled to full Universal Credit during those later periods.
Employment Support Allowance
Employment Support Allowance is worth up to £74.70 a week if you are ill or disabled.
You will be able to continue claiming this from the first day of being ill until March 24, 2020 the Budget documents reveal.
It will then revert back to normal, with applications after eight days, rather than one.
The change to one day was made to help people through Covid and will continue to do so into next year.
ISA rates
The Budget documents reveal that the annual allowances for tax-free savings will stay the same next year.
For adult ISA accounts the limit will remain at £20,000 a year and for Junior ISA’s and Child Trust Funds it will stay at £9,000.
Rishi Sunak vows to make it his ‘mission’ to cut taxes on Brits by the next General Election in 2024
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