More Misery and Woe

It’s a misty, grey, damp November kind of a morning this morning, after yesterday’s budget, and it’s not the budget that’s making it seem miserable, although truth to tell there seems little in the budget to make me rejoice!

Looking at the main points:

The main losers are:

Drinkers

From Sunday duty on cider will rise by 10% above inflation and beers, wines and spirits will rise by 2% above inflation. This means that cider will rise by up to 9p a bottle, 36p on a 70cl bottle of spirits, 2p on a pint of beer and up to 12p on a 75cl bottle of wine.

Drivers

Fuel duty will rise by 1p a litre in April and then a further 1p in October. Although this avoids a large hike in prices in April (the price of petrol was expected to rise by 3p) it doesn't help ease the rising cost at the pumps.

Families who are facing inheritance tax:

The Chancellor is to freeze the IHT threshold at £325,000 for four years, abandoning his previous plan to raise the threshold to £350,000.

Smokers:

Tobacco duty will rise by 1% above inflation in April and 2% above inflation year-on-year thereafter.

Large home buyers and London house buyers:

The Chancellor announced a new permanent top rate of stamp duty of 5% for properties worth more than £1m, from April 2011. The highest rate previously was 4%, which applied to properties worth more than £500,000.

Taxpayers: Income tax and National Insurance

As previously announced, the Chancellor has decided to freeze all income tax bands, which will lead people to pay more tax on their earnings. There will be a 0.5% increase in National Insurance contributions from April 2011, although those earning less than £20,000 a year will be unaffected. It means that a worker earning £50,000 a year will pay an extra £1,248 a year.

Pension savers:

High earners will be hit with the tax relief on pension contributions to be withdrawn. This mainly affects those with earnings of £150,000 or more. Although the change won't come into effect until next April.

The Winners:

First-time buyers:

First-time buyers will not have to pay any stamp duty on properties worth up to £250,000. Mr Darling said the removal of stamp duty up to £250,000 would be in place for at least the next two years and come in immediately. However, this may prove a false economy, with house prices for first-time buyers rising thanks to a demand boost from the tax relief but no more homes for sale, as homemovers are not exempt from the tax too.

People without bank accounts:

The Chancellor confirmed that everyone will have access to a basic bank account. Darling said this would impact 1 million people.

Small businesses:

The £2bn apparently raised from the one-off tax on bankers' bonuses will be used to fund a £2.5bn 'growth package' for small businesses and entrepreneurs. Business rates will also be cut for 500,000 small businesses for one year from October 2010.

Savings:

The Chancellor has previously announced that the annual limit on Isas was to be increased to £10,200, from £7,200, in April – the limit was raised the over-50s in October last year. He added today that the Isa limit would rise in line with inflation each tax year from now on.

Out of all these main points the only thing that really affects me is as a driver I am a loser.

None of the above budget main points makes me deliriously happy, and it certainly reinforces my belief that the sooner this government is thrown out, the better!