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Jeremy Hunt announced plans to reduce national insurance by 2p in order to lessen the tax burden for millions of employees prior to the upcoming general election.
The Conservative chancellor also officially announced a further prolongation of the freeze on fuel duty, which will result in drivers continuing to benefit from lower gasoline costs.
However, in order to fund the boatload of tax reductions for the Conservative party, the chancellor additionally revealed a new charge for vaping and the elimination of the non-domiciled tax designation.
The Independent examines the major beneficiaries and casualties of the chancellor’s Budget.
Winners:
Parents
Families will receive advantages from the current budget, according to Mr Hunt. He stated that the limit for the high-income child benefit charge will be raised from £50,000 to £60,000. Additionally, the taper, which reduces eligibility for child benefit as income exceeds £60,000, will now continue up to £80,000.
He clarified that individuals earning less than £60,000 will not be subject to the charge, which will remove 170,000 families from having to pay it. Furthermore, due to the increased taper and threshold, approximately 500,000 families with children will see savings of approximately £1,300 in the coming year.
Motorists
In a decision that will be well received by numerous drivers, Mr. Hunt has declared that the government plans to allocate £5 billion to halt the increase of fuel taxes.
The fuel tax cut of 5p, initially introduced in 2011, will continue to keep petrol prices low.
Workers
On April 6, Jeremy Hunt declared an additional decrease of 2p for National Insurance, on top of the previous decrease mentioned in the Autumn Statement.
The tax reduction will require the government to spend £10 billion, but it will result in a decrease in contributions for workers and an increase in their take-home earnings.
However, research institutions have cautioned that the decrease of 2 pence will lead to numerous individuals falling into a state of destitution. They also argue that this may worsen the disparities in financial status, as these households depend on the resources supported by taxes.
According to Mr. Hunt, this equates to an extra £450 per year for the average worker.
Investors
Mr. Hunt proposed a strategy for a new British ISA, which would permit investments of up to £5,000 in UK companies, as a part of his initiative to develop the UK into the next Silicon Valley.
He stated that the action would “motivate a greater number of individuals to put money into assets in the UK”.
Researchers
The chancellor revealed a £360 million funding for research to enhance British manufacturing. This investment aims to advance both manufacturing and research and development, particularly in the electric vehicle and pharmaceutical industries.
Film-makers and creative industries
The corporate tax relief for film and TV studios will be 40%, according to Mr. Hunt. He also stated that the UK will be the second best location for filming after Hollywood.
The coverage extends to UK-produced independent films with a budget under $19 million.
The Chancellor, Jeremy Hunt, presented his Budget to parliament today.
Losers
Home buyers
Homebuyers did not receive much relief from the statement made by the chancellor.
Earlier this year, The Independent reported that the Treasury was considering supporting 99% mortgages to assist individuals in buying their first home.
However, the concept was not selected.
Non-doms
The chancellor made a sudden change of plans and revealed intentions to tighten regulations on the tax exemptions granted to contentious non-domiciles in the Budget.
Two years ago, the media brought attention to the tax loophole when it was discovered that the prime minister’s spouse was a non-domiciled individual. Non-domiciled individuals are those who reside in the UK but are not established here permanently, resulting in them only being subject to UK tax on their earnings from within the country.
Previously, Mr. Hunt had refused to consider changes to the regulations, expressing concern that it may cause wealthy individuals to relocate abroad.
Ultimately, he concluded that he required the funds that the modifications would generate.
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Holiday let owners who are unable to generate more income may find it difficult to cover their costs.
The chancellor also announced a tax increase for individuals who own short-term holiday rentals. It is anticipated that this increase in taxes for those using second homes as holiday rentals will generate hundreds of millions of pounds.
However, the Conservatives have been cautioned that this modification will have negative effects on tourist hotspots throughout the nation.
Smokers
Unfortunately for smokers, the chancellor has declared that a tariff on vaping items will be implemented starting October 2026. This is an attempt to deter individuals who do not smoke from beginning to vape.
He additionally declared that an enhancement in tobacco tariffs will occur.
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Energy corporations operating in the Gulf of Mexico
Chancellor Jeremy Hunt has granted a one-year extension to the Energy Profits Levy, citing the rise in energy costs due to the ongoing conflict in Ukraine.
The windfall tax is imposed on earnings obtained through the extraction of oil and gas in the UK. In its initial year, this policy generated an additional £2.6bn for the UK government.
In an effort to provide financial assistance to families in the UK, Chancellor Rishi Sunak implemented a 25% tax on energy profits. This was later raised to 35% in January 2023.
Mr Hunt has declared that prolonging the expiration date of the Energy Profits Levy for another year until 2029 will result in an increase of £1.5 billion in funds.
Source: independent.co.uk
