PARENTS, workers and energy bill payers are among the winners in today’s Spring Budget – with smokers and drinkers hit.
The Chancellor has revealed a whole host of financial changes and updates affecting Brits in his speech in the Commons today.
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In his first Spring Budget since becoming Chancellor, Jeremy Hunt set out the government’s financial plan for the year and including payments, tax hikes and policy updates.
A number of policies were announced during the Autumn Statement in November such as the £900 cost of living payment and benefits being uprated to match inflation.
But, today Mr Hunt has unveiled further support for households, and some people will be happy while others have missed out.
Below we round up the winners and losers from the Budget.
Spring Budget at a glance
LOSERS
Smokers
It’s bad news for smokers as they’ve been hit a huge price hike on cigarettes as Mr Hunt has raised tobacco duty – with a pack of 20 going up by £1.55 to £14.39.
Hiking cigarette levies with 10.1% RPI – plus an extra minimum 2% bump applied to tobacco products – means a pack will jump by over 12%.
Drinkers
Drinkers will also be hit with a tax hike as Jeremy Hunt has said alcohol duty will rise in line with inflation from August.
It means more expensive booze in shops and pubs.
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Distillers and brewers have been begging the Chancellor to extend the freeze as they face huge cash pressures.
Hated alcohol levies were originally due to be hiked on February 1, but Chancellor Jeremy Hunt delayed the move for an extra six months.
Although, it’s not all bad news though because the Chancellor will cut the duty charged on draught pints in pubs across the UK by 11p in August.
Businesses
In a blow for businesses, Jeremy Hunt has also announced an increase to corporation tax.
Corporation tax will rise to 25% from 19%, despite protests from a number of Tory MPs.
The move risks sparking a major backlash from backbench Tory MPs, who think taxes are high enough as things stand.
And it could make the price of everyday products more expensive, as companies pass on the tax to consumers.
The hike is set to affect around 10% of businesses.
Motorists
Motorists are also set to be hit as car tax will rise from next month.
Vehicle Excise Duty will be uprated from April 1 by the rate of RPI for cars, vans and motorbikes – 10.1%.
Vehicle Excise Duty is an annual tax you have to pay to have your car on the road.
You then have to pay the tax from then on, to maintain having your vehicle on the road.
The exact amount your VED will go up from April 1 depends on the type of vehicle you own, as you pay different amounts based on its weight.
Your rate is different based on when you registered your vehicle too.
WINNERS
Energy bill payers
The current Energy Price Guarantee will be extended for another three months – meaning average bills will stay capped at £2,500 until June 30.
It will save the typical household £160.
In July, gas and electricity costs are predicted to fall to £2,100, meaning households might even see a fall in bills.
Energy bills were due to be hiked from £2,500 to £3,000 in April when the EPG went up.
Energy pre-payment customers
Prepayment meter (PPM) customers will no longer be charged more to receive their energy under reforms announced today.
PPMs are disproportionately used by vulnerable and low-income customers but they typically pay £45 extra a year for energy.
The move means that from April 2024, the prepaid price will be the same as that for customers on Direct Debits.
It comes after a national outcry over the bully-boy tactics of companies using debt collectors to force people to have the rip-off meters installed.
Drivers
Millions of drivers will be saving at the pump as the 5p fuel duty cut has been extended.
The move will save motorists £3.30 at the pump over the next 12 months, according to the RAC.
The Treasury has been under huge pressure in recent weeks to keep the popular 12-year (now 13) fuel duty freeze as well as the 5p cut.
In a major win for The Sun’s Keep It Down Campaign, fuel duty is set to stay FROZEN for a 13th year running.
Mr Hunt name checked The Sun today when he made the announcement to MPs in the Commons.
Fuel duty is a tax on fuel including petrol, diesel, biodiesel and bioethanol.
The Sun’s Keep it Down campaign has forced ministers to freeze duties for 12 years in a row.
Pension savers and workers
The Chancellor has abolished the lifetime pension allowance (LTA) in an effort to keep people in work for longer.
The lifetime allowance currently stands at £1.07million, with savers having to pay tax after that personal pension pot threshold has been exceeded.
But today, The Chancellor has abolished the lifetime allowance on tax-free pensions savings altogether.
The lifetime allowance currently stands at £1.07 million, with savers incurring tax after that personal pension pot threshold has been exceeded. It was due to stay at £1.07million until 2026.
Mr Hunt has also revealed that the annual allowance rate for pensions will be increased by 50% from £40,000 to £60,000.
Parents
Parents could be hundreds of pounds better off a year after the Government announced a raft of changes to the childcare system.
The biggest change was an extension of the free childcare scheme.
The help is coming in via stages, initially with 15 hours a week for 2 year olds from April 2024.
It will be extended to all 9 month old to 3 year olds for 15 hours a week from September 2024.
Then the 30 hours of free help will kick in for all 9 month to 2 year olds from September 2025.
Other changes will help too, such as increasing the child-to-staff ratio, more funding for nurseries and cash incentives for people who take on childcare jobs.
Schools are set to get more funding for wraparound childcare.
And, 30 hours free childcare was extended to parents with children aged between nine months and two years old.
Working parents on Universal Credit will now get 85% of their childcare paid upfront and the maximum amount of cash parents can claim will also go up from £646 to £951 for one child, and from £1,108 to £1,630 for two – an increase of just under 50%.
This is a massive win for the Make Universal Credit Work campaign, which has long called for childcare payments to be paid upfront.
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