As the dawn of the new budget approaches, here at Prestige Tax and Trust Services, we’re interested to see where the Government will be putting their money this year. We’ve done some research and come up with a few suggestions of what George Osborne will be putting forward later today – it’s not all new one pound coins!
First of all, the Chancellor is proposing a show cut of 1p to basic rate income tax. Some people suggest that this is being done in a bid to soften voters towards the Tories before the General Election next year. For workers on an average salary of £26,500, this would result in a saving of £160 a year. The Liberal Democrats are expected to have one the battle to raise the tax-free allowance by £500 to £10,500. This comes at a cost of £1.5bn.
Tax cuts like this will be funded by huge cuts to the current welfare bill, with a predicted £25bn slaughter of benefits. Some might argue that Osborne is picking the pockets of benefit claimants to offer what is, on a person-to-person scale, a relatively miniscule tax break. There have been calls for Osborne to lower the £150,000 bar for paying the top-rate of tax, though it seems unlikely that he will consider it at this point.
The Help to Buy Scheme has been extended to 2016. For more information on this, click here. We are also expecting to see details of the proposed plan for pension top ups. Those retiring before April 6th 2016 will be offered the chance to top up their national insurance stamps by £25 a week for 6 months for an increased state pension.
Elsewhere, packets of 20 cigarettes will see a 28p rise in price, and a 26p increase will be levied on 25gms of rolling tobacco. Similarly, the price of alcohol will see an upward hike, with bottles of wine going up by 12p, and spirits 48p more. Beer will be unaffected.
While there are some potential reliefs being offered here, it doesn’t seem like there’s enough in favour of working-class people or the unemployed. A rise in price of alcohol and cigarettes however will hopefully bring about a positive improvement in the health of the nation.
If you’re worried about tax issues or saving for the future and would like some advice, contact Prestige Tax and Trust Services. You can visit our website for our full range of services, and follow us on Twitter for regular updates.