A good Budget for beer drinkers and high earners
This was a Budget that was good for beer drinkers, but not necessarily if your favourite tipple is a glass of wine.
Here are some of the key tax changes from the chancellor’s red book:
Duty on beer, cider and spirits remains frozen
Chancellor Philip Hammond announced duty rates on beer, most cider and spirits will be frozen.
These are rates that brewers have to pay HMRC and are often passed on in costs to the consumer.
Freezing the rate means the cost of a pint of beer will be 2p lower than if duty had risen by inflation, the chancellor said. However, duty on most wine and higher strength sparkling cider will still rise by the retail prices index measure of inflation from 1 February 2019.
So it’s not such good news if you aren’t a beer drinker.
Fuel duty will remain frozen for a ninth year
There was good news for drivers. In 2019, fuel duty will remain frozen for the ninth year in a row, saving the average driver £1,000 since 2010.
This should technically keep the cost of petrol and diesel low, although there are other factors such as the oil price and transport costs.
Short-haul rates of Air Passenger Duty will not rise
Planning a holiday soon? Short-haul rates of air passenger duty will not rise for the eighth year in a row, keeping costs down for 80% of passengers.
Long-haul rates will rise in line with inflation.
Tax thresholds
There was some good news in the Budget for so-called high earners. From next year, the definition of a higher rate taxpayer will change.
The amount people will have to earn before they pay tax at 40% will increase from £46,350 to £50,000 in April 2019.
That could mean you see your tax liability decrease from the next tax year if you are earning below £50,000 as previously you would have been charged 40% on earnings above £46,350. Now that rate will be reduced to the basic 20%.
The personal allowance – the amount you can earn before paying tax – will increase to £12,500 from April 2019, one year earlier than planned.
The threshold will remain at the same level in 2020-21 and then increase by the rate of the consumer price index (CPI).
The £650 increase to the personal allowance means that in 2019-20 a typical basic rate taxpayer will pay £130 less tax than in 2018-19 and £1,205 less tax than in 2010-11, the Treasury said.
Additionally, the lifetime allowance for pension savings will increase in line with CPI for 2019-20, rising to £1.05m.
The ISA allowance will remain unchanged for 2019-20 at £20,000 and the dividend allowance will also still be £2,000.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen
