Updated: Feb 9, 2019
The big news now David Beckham’s hair has become yesterday’s chip wrapper, is of course the Budget.
The Chancellor has made his stand, tried to inject a touch of humour, which to be honest makes most people grimace, and said lots of stuff which to nearly everyone doesn’t really mean much. I would imagine 95% of people are interested in Booze, Fags and (income) Tax.
Well the good news for Beer, Cider and Scotch drinkers is that their duty is frozen. The bad news for the Prosecco drinkers is that theirs hasn’t; you can kind of see the logic, most wine glasses these days seem to hold about half a pint, have the same strength as Special Brew and cost quite a bit more, so a good place to put a percentage tax.
It will add 7p to a bottle of still wine and 9p to a bottle of sparkling wine.
He has brought forward the increase in the Personal Allowance to £12,500 by a year, so it will be effective April 2019, but the threshold for 40p has increased to £50,000 as has the upper limit for NI, so effectively halving the benefit for higher rate taxpayers. There’s been a good deal of comment from the left about benefiting the better off and from the right about taking away what he’s just given. My view is that if the higher rate threshold had increased with inflation since it was first introduced it would now be about £90,000, so he’s pulled a great deal more people into the higher rate net by attrition and it should also be remembered that if you continue to raise the tax free bit without increasing the higher rate bit, eventually everyone will pay the higher rate!
I realise that the increase in the NI limit is causing a few gripes, but from my standpoint it seems like a good idea to coordinate the Tax and NI thresholds; we already have three different starting thresholds for Tax, NI and AE (Auto-Enrolment), let’s have a bit if common sense.