In his first Budget, Chancellor Philip Hammond unveiled a number of measures to ensure stability as the UK prepares to leave the EU. But, while it's been regarded as relatively cautious, if you're self-employed or a sugar fiend, watch out.
Income tax allowance rises
The amount you can earn before you start paying tax is set to rise by £500 to £11,500 this April - putting an extra £100 a year into your pocket if you're a taxpayer.
Increase in national insurance for self-employed
Bad news for the self-employed with class 4 national insurance rates set to increase from April 2018. These are charged on income up to the higher rate threshold (currently £43,000
) and will shift from 9% now to 10% and then 11% in April 2019.
Estimates suggest this will cost the average self-employed person 60p a week by 2019.
Cut in dividend allowance
A £5,000 dividend allowance was introduced in April 2016, to allow investors to receive up to £5,000 of dividend income tax-free. Overly generous according to the Chancellor so he's going to reduce it to £2,000 from April 2018.
This will affect investors and underlines the importance of holding stocks and shares in tax-efficient vehicles, such as ISAs and pensions.
Tax on your sweet tooth
From April 2018, the sugar tax will mean you'll pay more for your favourite fizzy pop and sweet drinks. Where a drink contains more than 5g of sugar, you'll pay sugar tax at 18p per litre, with this increasing to 24p per litre where the sugar content is 8g or more. Fruit juices and milk based drinks are exempt but you can expect to see a can of Coke rise by around 8p.
The money raised will go to the Department for Education to fund school sports.
More money for social care
To address the crisis in social care funding, the Chancellor earmarked an extra £2bn over the next three years to help councils provide care and announced that a green paper on the issue would be published later this year.
Definitely necessary but with several reviews into long-term care funding already undertaken - most recently the Dilnot Commission in 2011 - there are concerns that this green paper will end up gathering dust too.
If the Budget's going to leave you worse off, here are five simple ways to boost your bank balance:
- Shop around - cheaper deals on everything from your energy and mobile phone to your credit card and motor insurance are yours for a small investment of time on the comparison websites
- Clear out the clutter - ditch unwanted subscriptions and sell stuff you no longer need or use on auction sites such as eBay
- Buy online - doing your grocery shopping online will help you stick to the essentials and avoid all those tempting end of aisle offers
- Give it up - whether it's smoking, an afternoon latte or a Friday night takeaway, you'll save a small fortune with very little pain
- Benefit check - millions of pounds of tax credits and other benefits go unclaimed each year so check you're getting everything you should on a website such as entitledto.co.uk