Budget 2024 winners and losers from taxpayers to landlords and first-time buyers
The Chancellor announced his Spring Budget today - but will benefit the most and who is set to lose out?
After weeks of speculation, Jeremy Hunt finally shared his fiscal plan ahead of the General Election. Hunt cut National Insurance for millions of workers, confirmed another extension of the fuel duty freeze, and introduced a new tax on vaping.
Here the Mirror takes a look at who is classed as a "winner" in today's budget and who is sadly classed as a "loser".
Winners
Workers/taxpayers
Millions of workers will take home more of their wages as another cut for National Insurance was announced today. If you're an employee, you currently pay 10% on earnings between £12,570 and £50,270 in Class 1 National Insurance contributions. However, this is being cut to 8% from this April. The self-employed rate will also fall from 8% to 6%.
8 money changes coming in February including Universal Credit and passport fees
The Chancellor said the move would benefit around 27million workers with the average person saving £450. However, it is worth noting that the tax bands have remained frozen which means more people are being dragged into starting to paying tax for the first time, or moved into a higher tax band.
Drinkers
Alcohol duty will remain frozen until February 2025 with the Chancellor saying the Government was backing the “great British pub” with the move. The Chancellor froze alcohol duty until August 1, 2024 as part of his Autumn Statement last November.
In his Budget today, Jeremy Hunt confirmed the freeze will continue. At the time of introducing the freeze last year, the Treasury said it would take 3p off the average pint of beer.
Drivers
The fuel duty freeze - alongside the "temporary" 5p cut first introduced in 2022 - has been extended for a further year until March 2025. The Chancellor said the move would save drivers around £50 a year adding that it would also "bring total savings since the 5p cut was introduced to around £250".
This is the fourteenth year in a row the duty has been frozen. The Chancellor said the decision, alongside the freeze on alcohol duty, also helped the fight against inflation.
Child Benefit claimants
The Chancellor has addressed the "unfair" Child Benefit rules by upping the threshold for the high income Child Benefit Charge (HICBC). Currently, if you or your partner earn more than £50,000 a year, you have to pay some of your Child Benefit back.
When you start earning above this amount, you have to pay back 1% of the Child Benefit you receive for every £100 earned above £50,000. So, if you earn £55,000 a year, you'll pay back 50% and if you earn £60,000 or more you have to repay it all back. As this threshold only applies to one person, so if you and your partner earned up to £100,000 together and not have to pay anything back but if a single parent was paid more than the threshold then they would.
Warning as millions on Universal Credit could miss out on hundreds of pounds
From April, the threshold will rise to £60,000 and the higher rate to £80,000. This means your Child Benefit will only start to be tapered away when you earn £60,000 or more.
Benefit claimants
Universal Credit claimants will be given more time to pay off a budgeting advance. This is a loan from the Department for Work and Pensions (DWP) which is given to help with certain costs such as emergency household repairs. As it's a loan, you do have to pay it back. At the moment, you have 12 months to repay a budgeting advance - but it was confirmed today that this will increase to 24 months.
The smallest budgeting advance you can borrow is £100, but you may be able to get up to £348 if you’re single, £464 if you’re in a couple, or £812 if you have children. As you are not charged interest on these loans, you only pay back what you borrowed as this is usually from deductions from your Universal Credit payments.
Brits selling a second home/landlords
From April, the higher rate of Capital Gains Tax for those who sell a property other than their main residence will fall from 28% to 24%. Capital Gains Tax is a tax on the profit when you sell something that's increased in value since you got it. The Treasury says the move "will encourage landlords and second home-owners to sell their properties, making more available for a variety of buyers including those looking to get on the housing ladder for the first time".
Shaun Moore, tax and financial planning expert at Quilter added: “This means a higher-rate taxpayer making a gain of £20,000 on their second home will pay £4,080 in Capital Gains Tax, after deducting the current £3,000 allowance. This is £680 less than what they would have paid under the previous regime, which would have charged them £4,760."
However, Shaun noted that the Government hoped the measure would "stimulate the property market" however with the abolition of holiday letting regime he added: "For some, it will be a case of robbing Peter to pay Paul.”
Small businesses
The threshold for VAT registration will rise from £85,000 to £90,000 from April 1 with the Treasury saying: "We should reward smaller businesses who make a big impact on our society and employ millions of people."
Losers
Smokers/vapers
Although not happening immediately, the Chancellor announced that Tobacco Duty will face significant "one off" hike in October 2026 when the new Vaping levy is introduced. The one-off increase will be £2 per 100 cigarettes or 50 grams of tobacco. The new vaping tax will affect the liquids in e-cigarettes.
The duty on vapes will be £3 per 10ml for a vape that contains 11mg of nicotine or more per ml. This would apply to all Elf Bars, the most popular disposable vape, as they contain 20mg/ml. However, an Elf bar contains only 2ml to begin with, so this would amount to only a 60p increase.
The Chancellor told parliament: "Because vapes can also play a positive role in helping people quit smoking, we will introduce a one-off increase in tobacco duty at the same time to maintain the financial incentive to choose vaping over smoking."
First time buyers
No extra help was announced today for first-time buyers who are struggling to get on the property ladder. It was expected that the Chancellor would announce changes to the Lifetime ISA (LISA) in the budget today. Specifically, many hoped the withdrawal penalty would either be scrapped or cut from 25% to 20% or the maximum amount a property can cost to use the LISA would be lifted from the current £450,000.
However, nothing was announced much to the dismay of Money Saving Expert (MSE) website founder Martin Lewis who had lobbied the Government on the issue over the last few months. The Government also did not announce and plans for 99% mortgages.
Pensioners
The cut to National Insurance will apply only to income earned by employees - so those who are working will benefit but not those who depend on "unearned" income. This includes those who receive just their pension or a state pension. No announcements were made on Inheritance Tax either - something that was widely hinted at and discussed in the lead-up to this year's budget. Many hoped for at least a reduction in the current rate of 40% or the introduction of more generous allowances.
Non-doms
The special tax status for non-domiciled (Non Doms)individuals in the UK, which allows them to pay tax on only their UK earnings, will be abolished. The tax loophole hit the headlines two years ago when it was revealed the prime minister’s wife was a non-dom, a person who lives in the UK but is not settled here permanently, meaning they only pay UK tax on money made in this country.
Originally, the Chancellor rejected calls to reform the rules, however today he said it would be replaced with a residency-based system. There will be no tax on new arrivals for first four years, but they will then pay the same tax as UK residents thereafter. There will also be transitional arrangements in which non-doms will be encouraged to bring overseas assets to the UK.
Business class flyers
The Chancellor announced higher rates of air passenger duty on business class air tickets. So these will be more expensive.
Savers
No changes were announced to the personal savings allowance - which is how much you're allowed to earn in interest each year before you need to pay tax - or ISA savings accounts. It was hoped that the ISA savings limit would be increased from the current £20,000 and that Brits would be able to save into multiple ISA accounts - rather than just one.
However, the Chancellor did announce a new "British ISA" which will allow savers to put away an extra £5,000 a year, on top of the £20,000 ISA allowance. Steven Cameron, Pensions Director at Aegon said the new British ISA will "appeal to those who currently max out their ISA limits".
He added: "It will also offer transparency, appealing to those who wish to be certain their investment is staying within the UK. It will be important the forthcoming consultation creates an unambiguous definition of what qualifies as a UK investment within a ‘British ISA’.
“The creation of the British ISA comes alongside a push to get UK defined contribution pension schemes to invest more in the UK, including in private assets. The Chancellor clearly wants to take every opportunity to use all types of savings and investments to boost UK economic growth.”
The Chancellor also confirmed a new British Savings Bond from NS&I which will offer a guaranteed savings rate over three years - although the savings rate has not been confirmed.
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