Jeremy Hunt has unveiled massive £24bn tax hikes this morning as the OBR confirms economy is ALREADY in recession.
We have gathered together the headlines from today's budget and how you may be affected, if you need further advice, please do not hesitate to contact Gareth and the team at GRC Accountants.
Mr Hunt's massive package of 'fiscal tightening' is designed to ensure he can show that Britain's debts will begin to fall as a proportion of GDP in five years' time.
To achieve this, he will hike taxes to a record post-war high, hitting workers on all incomes.
Everyone faces paying more in tax as a freeze on the personal allowance, basic and higher thresholds is extended to 2028, dragging people deeper into the system by 'stealth'.
- Income tax thresholds will be frozen for six years. The basic rate threshold will stay at £12,571 until 2028, while the starting point for 40p tax will be held at £50,271.
- Thresholds for national insurance, inheritance tax and tax-free pension savings will also be frozen.
- Many more families will lose some or all child benefit, as their wages rise while the £50,000 taper level remains.
- High earners will see the starting point for paying the 45p rate slashed from £150,000 to £125,000 costing on average £580 a year.
- Savers, investors and second home owners will also be hit, with capital gains tax and dividend tax both rising. The dividend free allowance will be reduced from £2,000 to £1,000. The £12,300 tax-free allowance for capital gains tax is set to be halved to around £6,000 and the annual £20,000 limit for ISA savings will be frozen.
- Pensions and benefits will both rise in line with the September inflation figure of 10.1 per cent, raising the new state pension by £18.70 to £203.85 a week
- In a blow to the property market, the Chancellor said stamp duty cuts will be reversed in 2025.
- Subsidies on energy bills are being downgraded to save money, with the average household bill likely to rise from £2,500 to £3,000 from April onwards.
- Town halls will be freed to increase council tax by up to 5 per cent without need for a referendum.
- Electric cars will be charged road tax for the first time.