Like many of the Budgets that have come before, the Chancellor’s most recent book balancing efforts have got businesses and industry leaders across the country scratching their heads.
With so many changes affecting so many different areas of the economy, it can take a little time to work out who are the winners and are losers. If you’re worried about how the budget will affect you and your family, here’s a quick look at the main changes the Chancellor has made to the country’s finances.
The UK energy industry saw big gains in the 2016 budget with support worth £1billion announced for the oil and gas industry. This has largely been achieved by abolishing Petroleum Revenue Tax and reducing the supplementary charge on oil and gas extraction. As the cost of extracting oil and gas drops, homeowners should begin to see these savings reflected in lower energy bills.
People looking to get their foot on the property ladder have been given a leg up by the Chancellor’s new budget, with the introduction of the Lifetime ISA. Any adult under 40 can open an ISA and put up to £4,000 a year away in savings. When they come to buy a house, the government will give them 25% of the money they’ve saved as a bonus.
In other good news for homeowners, the rate at which a property becomes liable for Stamp Duty will go up from £125,000 to £150,000, making it easier for sellers under the threshold to ask a higher price for their properties.
One of the biggest changes brought in by this Budget is the rise of the 40p tax threshold from £43,000 to £45,000 for the 2017-2018 tax year. This will lift around 500,000 workers out of the higher tax bracket, saving hundreds of households up to £500 a year.
Plus, The Personal Allowance – the percentage of a person’s income not liable for income tax – will increase to £11,000 for the 2016-2017 tax year and go up a further £500 to £11,500 the following year.
The Chancellor also made allowances for the ‘Sharing Economy’, allowing homeowners to earn up to £1,000 tax free on Airbnb lettings and giving eBay traders the right to make up to £1,000 in profits before they need to face the taxman.
For many observers, the biggest surprise in the budget was the introduction of the sugar tax. According to the new rules, super sweet soft drinks will be taxed 25p per litre, news that sent the shares of drinks companies plummeting.
With lower tax rates for high earners, corporations, small businesses and the energy industry, the new budget is good news for certain sections of society. However, with the Brexit referendum between now and the next budget, everything could be very different by this time next year and only time will tell what exactly these changes mean for households across the country.