'The Budget - it's about WHEN not WHAT' discussion

Former_MSE_Penelope

The Budget - it's about WHEN...
It's not just what's changed but when they hit that counts

This emergency budget revealed spending cuts and tax rises that'll impact for years....

• Capital gains tax - Today: The tax on one off profits (eg. selling 2nd homes) for 40% taxpayers jumps to 28% from 18%.
• Petrol prices - up 1p in October: While the Chancellor said "no new rises", the scheduled 1p/litre rise in Oct is still on.
• VAT rise - up to 20% on 4 January: Almost everything we buy will cost 2.1% more as VAT rises from 17.5%, see the VAT increase news.
• Mortgage help decreased - Oct 2010: The 'Support for Mortgage Interest' current generous 6.08% help will drop to a new rate (currently 3.67%).
• Child benefit frozen - until April 2014: It's not being cut, there'll just be no increases in the next three tax years.
• Tax credits changes - 6 April 2011: Next tax year most families with £40,000+ annual incomes will get less tax credits, while some on lower incomes will see the 'child element' increased by £150 above inflation (see tax credit help for general guidance).
• Tax personal allowance increase - 6 April 2011: Next year most'll be able to earn £7,475 tax free (currently £6,475).See MSE News: Emergency Budget: tax cuts for low and middle income earners.
• Wines, beer, spirits & tobacco - April 2011: While there are "no new rises" duty is scheduled to rise 2% above inflation next April.
• Benefit rises linked to CPI - April 2011: Currently linked to the RPI measure of inflation, it'll change to the CPI measure which tends to be lower.
• State pension triple guarantee - April 2011: From then it'll always rise by the HIGHER of earning, inflation or 2.5%.
• Disability living allowance medical assessment - 2013/14: Their aim is more medicals to cut £1.4bn from the system.

Overall the effect of this budget is to take money from our trousers to help repay the deficit - so it'll cost. Thus it's important you do your own budget (use the free budget planner) to ensure you don't spend more than you earn - plus to try and mitigate cost increases do a full money makeover now.

Please click reply to discuss below:

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Scotsman55

According to today's Daily Telegraph:

"Treasury documents make it clear that an individual’s gains will be added to their income when assessing whether they remain basic rate taxpayers for the purposes of the new higher rate of CGT. So, anyone whose income and gains exceed £43,875 will be liable to pay 28 per cent rather than 18 per cent CGT on gains ..."

kevpc

some of the budget increases, regardless of when they are to start will be tolerable. however, increasing vat is a bad move. those on low incomes have little spare money as it is, now they will have even less! nothing has been done to stop companies putting up their prices. things like energy, water etc will cost more and with less money available, the low earners will struggle to pay those bills. not all people on benefits are in a position to do anything about it, eg those on incapacity benefit. cutting/reducing/freezing payments in these cases is a disgrace! the increase of £200 /year in income for the lower earners isn't going to cover the extra daily/necessary costs incured.
with the change to old age pension payments, is there to be an increase now to bring them in line with average earnings? not much good having the yearly increases indicated if there isn't an increase now. pensioners struggle on the state payments of less than £100/week/single person, much less than the average wage and are hit with taxation on any savings they have (after being encouraged to save ready for retirement). if they lose or have benefits cut/reduced, there will be even more finding any quality of life extremely hard to achieve. they deserve better treatment!
he should have made it impossible for companies to avoid tax by shifting profits off-shore.
no where near enough was done to make those ultimately responsible for the financial crisis pay for their wrong doings. as per usual, it is down to those that have least to give the most.
if Osborne thinks what he has done is fair, he needs to think again and/or try to survive as a low earner. wonder how long he would last!

kevanf1

Once again the disabled are targeted and made to worry unnecessarily. As if we don't have enough to contend with! Yes, I hear the moans from the back saying if you are really ill/disabled then you have nothing to worry about. I say that is rubbish as there plenty of cases where people who have had legs or arms amputated have been told they are not disabled. Plenty of us may look in good health outwardly. Yet, inside we live in constant pain day after day, after day. I've been like this for 18 years now. I did work for the first eight of those until the pain became too bad to bear.

By all means target those who are the fraudsters but don't add another burden to us who are genuine.

scoobydoobydoo

I am wondering if anyone knows what the cut off will be for the Health in Pregnancy and the Sure Start grant.

I know that it will be abolished next April but will it be for babies born on or before the cut off date, or women who hit the claim dates in pregnancy on or before then (ie, 25 weeks pg for HIP and 29 for Sure Start)

harryhound

I think there is VAT too on beer wine fags & petrol so there will be another 2p plus in the pound next January - probably work out at 3p on a litre of fuel and 5p on a pint in a pub.

jokerjasper

At the end of the day what would we do in George Osbourne's position? I think he has done a really good job given that this is not his mess to clear up. This is entirely the fault of the labour government. The people who do go to work simply cant afford to pay for all the pensioners, the single mums, disabled people and everyone else who say they cant find a job. There are not enough people contributing to the economy to make the figures add up. The bottom line is that anyone who is physically able to contribute to the economy should do that.

BobbinAlong

Had it confirmed today that our (civil service) pay will be frozen from August this year until August 2013 :-(
Those under £21k get small rises annually still though.
I'd like to get to the higher rate tax band before I retire. Fat chance at present.
Bet the gas, electric etc. don't freeze their prices either.

Bogof_Babe

Another aspect is that if you are a public sector employee due to retire in the next two years, this will affect the amount of pension you receive won't it?

harryhound

BobbinAlong wrote: »

Had it confirmed today that our (civil service) pay will be frozen from August this year until August 2013 :-(
Those under £21k get small rises annually still though.
I'd like to get to the higher rate tax band before I retire. Fat chance at present.
Bet the gas, electric etc. don't freeze their prices either.

Our real problem now is the second massive deficit - the balance of payments deficit. We need workers making goods & services that we can sell to foreigners.

Under labour our currency was devalued by about 25% and energy prices are dictated by the world economy - not to mention that we have burn the better part of our N.Sea reserves and now have to import at extra cost from Norway & Russia and whoever is going to supply Milford Haven & the Kent side of the Thames estuary.

EmehEm2005

The ConDem Budget: A budget for millionaires by millionaires.